Swiss bank fights against early-recession losses amid restructuring rumors. UBS may be looking to sell or merge its U.S. retail-brokerage business, but it's still pulling in brokers from rival firms. The Swiss bank recently lifted out a pair of Minnesota-based Smith Barney teams that, taken together, accounted for $620 million in client assets.

First up

UBS Financial, the bank's U.S. retail brokerage, says it has hired hundreds of brokers away from rivals in recent months -- more than 130 in the last half Novemeber alone. Mind you, UBS saw an exodus of U.S. brokers in the first half of 2008, as staffers and clients responded to news of multibillion-dollar write-downs and high-reaching legal probes. Bear Stearns aside, UBS looked for a while there like the financial institution most hurt by a financial crisis.

But since Wall Street's woes went from acute to alarming last September, it has been hard to single out UBS as the emblem of a sick industry. And UBS seems to have cottoned on to this: in addition to recruiting U.S. brokers, it's been putting out word that, as a company that suffered badly first in the downturn, it's positioned to exit the morass ahead of its rivals.

UBS' ADR price is down about 72% from its 52-week high compared with the 86% stock-price slides from 52-week highs for Citigroup and Bank of America.

Big deal

Even UBS' smaller Swiss rival Julius Baer -- which early in 2008 liked to invite reporters to compare the results of its pure-play private-client focus with the troubles multi-line UBS found itself in -- has been hit hard lately by client defections on top of market losses and, just now, the semblance of a trading scandal.

Still, with recent rumors about a possible U.S.-brokerage joint venture between UBS Financial and Wells Fargo's NAME Wachovia Securities unit -- supposedly on the model of planned merger of Morgan Stanley's private-client business and Citigroup's Smith Barney -- it may be that UBS might has significant restructuring in store.

And if it fails to find a partner to help it compete with a Morgan Stanley Smith Barney or Bank of America's Merrill Lynch, it could sell its U.S. private-client business altogether -- though probably at a sharp loss after nearly a decade of investing in its buildout.

Trailing numbers

In adding U.S. brokers, UBS seems to be focused, prudently say some observers, on recruiting mid-career high-producers rather than corner-office types who may have fat books and loyal clients but little time or drive left for significant business development.

Though several recruiters say UBS is topping its competitors with offers that can amount to 220% of an advisor's trailing 12-month production, UBS says that's simply not the case.

"Any suggestion that we are offering packages that depart from well-established and well-known industry norms is wrong," according to a UBS spokesman. "In many cases financial advisors are choosing to join UBS despite offers from their current firms, or [from] rival firms, that match our compensation packages."

Ex-Smith Barney brokers Paul Koch and Derek Cherne and their teammates Jim Nelson, David Henrickson, Dan Miller, Dean Breitbach, Rebecca Burns, Shannon Wright and Rachel Jordal joined UBS' office in Wayzata, Minn., on the western fringe of Minneapolis; Les Brunker and his former Smith Barney colleagues Neil Knutson and Caleb Quenzer joined UBS in Minneapolis itself.

The Koch-Cherne team accounted for $3.8 million in combined production and managed $410 million in client assets at Smith Barney. The Brunker team had $2.3 million in production and managed $210 million. -FWR

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