Family Office
Swiss bank nabs advisors from shell-shocked rival

UBS brings in a big armload of private-client brokers from Lehman Brothers. The U.S. wealth-management wing of UBS has plucked more than two dozen financial advisors out of Lehman Brothers, according to an internal email sent to UBS staffers yesterday and subsequently confirmed by a company spokeswoman. UBS says the hires are part of a campaign to vacuum up brokers from its rivals.
"This influx of talented and highly productive advisors is gratifying because it demonstrates renewed confidence in UBS and our wealth-management franchise," Marten Hoekstra, head of UBS Wealth Management U.S., writes in the email.
The 26 ex-Lehman brokers had approximately $12 billion in client assets and hauled in about $60 million in commissions and fees in 2007.
Lehman, weighed down to the breaking point by all-but-worthless mortgage-backed assets, filed for bankruptcy protection last week. Last week also saw Merrill Lynch agree to be acquired by Bank of America and a stock market run that nearly forced Morgan Stanley and Goldman Sachs into shot-gun weddings or Lehman-like ends.
In comparison
A lot of the pressure came off Morgan Stanley and Goldman -- and financials generally -- late last week when U.S. Treasury secretary Hank Paulson bruited the notion of using taxpayer money to buy bad securities from Wall Street firms and then sell them in a process reminiscent of the Resolution Trust solution to the savings-and-loan meltdown of about 18 years ago.
The departures follow London-based Barclays' decision last Friday to buy Lehman's private investment-management unit in addition to the New York-based firm's capital-markets business. Lehman's investment-management business, which is distinct from its Neuberger Berman investment advisory, has -- or rather had -- about 350 private-client brokers.
Among the former Lehman brokers joining UBS in its New York private-client office are Angela Mwanza, Heather Molin, Robert Sechan III, Jeff Kobernick, Adam Rosenthal, Kenneth Witover and Scott Stackman. They report to branch manager Frank Minerva.
Reporting to branch manager Barcley Perry in Los Angeles are former Lehman brokers William Calvert, Stanley Abrams, Steve White, Thomas Barry, David Goodenough, Mike Wunderli, Kirk Wendorf, William Kun, Ryan McClellan, Johnny Chuchen, Michael Wallace and Kevin Kramer.
Before an eventful post-Labor Day period that has seen U.S.-government bailouts for mortgage-market makers Fannie Mae and Freddie Mac and insurance company AIG in addition to Lehman's demise, Merrill's proposed sale and apparent near misses for Morgan Stanley and Goldman, few big financial-service companies looked shakier than UBS.
The Zurich-based bank, which has been roiled by $43 billion in subprime-mortgage related writedowns over the past year or so, last month reported a second-quarter loss of about $330 million against a profit of $5.1 billion in the year-earlier period.
UBS' wealth-management clients withdrew about $16 billion in the second quarter, and pre-tax profit for the unit declined 11% to $1.2 billion. In the U.S., UBS' private-client business had a pre-tax loss of $682 million, partly on a $900-million set-aside to make good on questionable dealings in auction-rate securities.
UBS is also under investigation by the U.S. authorities on suspicion helping clients evade U.S. taxes.
As a result, UBS has been losing wealth managers, particularly in the U.S. and the U.K. -FWR
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