So what will the fallout be for UBS with the latest scandal and negative news?
Well, although there won’t be any compensation changes for financial advisors as a result of the trading loss of $2.3 billion, in all probability there will be other far reaching losses.
No doubt, the biggest loss is their credibility with their clients who are asking “is my money safe with this firm?”
And when advisors hear their clients are anxious, they begin to think about “moving out.” They may not be walking out tomorrow, but you can be certain they’re looking very carefully at how this latest “blunder” on the part of UBS is going to affect their prospecting success.
With a loss of revenue this large, retention and recruiting is destined to suffer. You’re not about to see a lot of advisors rushing in the UBS doors.
As a result of the most recent surprise resignation of Chief Executive Gruebel, rumors began flying that UBS Wealth Management Americas would be on the block.
On Monday, Chief Executive Bob McCann sent an internal memo to all employees of UBS Wealth Management Americas assuring them there were NO plans to sell the US based Wealth Management business.