The story is an example of the kind of speculation as to what UBS and the Credit Suisse managers who stay on board will do to try to pull in new money.
Bloomberg said in an article late last week citing unnamed sources, that relationship managers at both firms will receive commissions of 15 basis points, or $0.15 for each $100 in new client money they can bring in. This news service has contacted UBS for comment and may update this article in due course. It hadn’t received a comment at the time of going to press.
The newswire said this incentive idea is more attractive than existing bonuses at the two firms and the typical incentives in the industry, which are usually tied to inflows of a narrower slice of fee-generating assets and can often include other hurdles that must be met.
WealthBriefingAsia and its sister news services in Europe and North America have been told by bankers at rival institutions that they are getting enquiries from Credit Suisse clients who want to diversify where they put their money. After a slew of scandals and missteps, Credit Suisse suffered heavy outflows last year and the continued bloodletting, and its sharp share price fall, led to the Swiss government’s support for a UBS takeover.
The Bloomberg article noted that Iqbal Khan, the wealth boss at UBS, was in Singapore in recent days to meet with staff and clients. Khan, who previously worked at Credit Suisse, has been pushing hard to retain talent and bring back funds to the new combination.
A number of figures in the executive search and related fields have told WealthBriefingAsia that Credit Suisse bankers have left or are planning to leave. It is highly likely that Khan, given his own experience, will want to encourage high-performers to stay.
The stakes are particularly high in Asia, the world’s fastest growing wealth management market, as demonstrated by a number of Western banks setting up in the region over the past 20 years. Credit Suisse has been one of the most vigorous, including its business in mainland China.
As reports such as this show, UBS faces a huge task of ensuring that the two organisations integrate while dealing with legacy legal and regulatory issues that have plagued Credit Suisse for years. UBS has also had run-ins with regulators over the years, such as with the US over its povision of offshore accounts for wealthy Americans.
Among other stories, it has been speculated that tens of thousands of jobs could go as a result of this merger.