UBS Americas’ Naratil on Verge of Major Management Revamp
Almost six months into his regime as president of UBS Wealth Management Americas, Tom Naratil is unfurling a reorganization of the national broker-dealer’s sales structure aimed at cutting costs and increasing efficiency through centralization.
Naratil, whose former role as chief financial officer of Swiss banking giant UBS Group AG raised expectations that he would be bringing a gimlet eye to operational efficiency, is expected to reduce or eliminate the broker-dealer’s eight sales regions under which its 7,145 brokers operate, according to three sources inside and outside the firm.
The two divisions at the top of the “wealth management advisor group” sales structure are likely to be expanded to four, while the approximately 80 branch-office complexes that branch managers and brokers rely on for operational leverage will be about halved and positioned as “market areas.”
The changes are expected to be announced over the next few weeks.
UBS’s private wealth management group, which services very wealthy clients, also is affected.
Ray DiNunzio, one of seven regional managers in the PWM structure, left on Monday, according to several current and former brokers and managers. A source said that private wealth management head John Mathews delivered the news to DiNunzio personally this morning and was walking door to door to reassure advisors that UBS remains committed to the business.
DiNunzio began his UBS career in 1998 and joined PWM as a regional director in 2004, according to a company website. One former executive said he was an old-school manager who understood advisors’ businesses, eschewed company politics and was the Number Two internal recruiter of brokers within the retail system in recent years.
A person answering DiNunzio’s phone at his Houston office on Monday said that he departed without explanation. UBS spokesman Gregg Rosenberg said the company does not comment on personnel moves, and also declined to comment on a broader reorganization
Other winners and losers in the plan, which was disclosed to regional managers in New York last week but has not yet been announced to the field, could not be determined.
The restructuring at UBS Wealth Americas aligns with a broader campaign by Zurich-based UBS to cut costs globally and save $2.2 billion by the end of 2017. Part of the savings are expected to come from reducing back-office staff and pooling operational and administrative resources across geographies.
The bank began notifying brokerage support staff in the U.S. of terminations this week, said a source at the broker-dealer who spoke on condition of anonymity. When the bank announced the plan, Rosenberg said jobs in the Americas would not be affected.
Naratil, who like his free-spending predecessor Bob McCann is president of UBS Americas as well as of the U.S. retail brokerage business, is more than a bean-counting emissary from corporate headquarters, managers and some brokers said. According to his corporate biography, the Yale University history major has spent his entire 32-year career at the firm, beginning with his hire in 1983 by UBS Wealth predecessor Paine Webber Jackson & Curtis.
Prior to being named CFO of Wealth Management Americas in the heart of the financial crisis in 2009, Naratil has senior roles in market strategy, marketing, client development and was head of the investment products group.
His ascent coincided with UBS’s importing of McCann in 2009 from Merrill Lynch to revive the money-losing U.S. broker that had been battered by auction-rate securities and tax scandals. McCann and lieutenants he quickly hired from Merrill reduced the sales force from more than 9,000 to about 7,000 brokers. But he also stoked wirehouse recruiting wars by paying multi-million dollar bonuses to veteran brokers to get client assets on the books. When he left his president’s post at yearend 2015 for the largely honorary post of chairman, UBS Wealth Americas had $3.2 billion of recruitment loans on its balance sheet.
Naratil has made adjustments to Wealth Management Americas’ executive committee since he took over in January but the senior sales structure inherited from McCann remains largely unchanged.
Some sources speculated that the divisional chiefs under the new structure may report directly to Naratil rather than to Brian Hull, head of the client advisory group. Hull, a longtime Merrill Lynch brokerage executive who followed McCann to UBS in 2009, did not immediately return a call for comment.
In shrinking its field structure, UBS would be following the path of its major competitors. Morgan Stanley, for example, has reduced its regions to eight from 12, and was planning a further consolidation that has been put on hold because of management changes at the top.