Is it worth poaching?: Everyone’s after new UBS client advisors

Lombard Odier expands into central Switzerland

Heller follows the well-known CS team to Lombard: Serge Fehr. He previously headed Swiss private banking at Credit Suisse and was a board member of CS Switzerland. Its new mission: to make Geneva-based private bank Lombard Odier a major player in German-speaking Switzerland. In July, Lombard hired an entire team from CS in Zug to deal with “Entrepreneurs and Managers”. To welcome Marco Arnold’s new team, Lombard gave them a new venue in Zug.

Hunting season in Swiss banking: EFG snatches two teams from CS; one in Gstaad and the other in the luxury town of St. It was in St. Moritz. “EFG and Lombard are the most active in Switzerland in poaching people from us,” says a senior UBS banker. EFG boss Giorgio Pradelli openly told “Finews” that the takeover of CS was “like a starting point in the talent market” for him.

But the question is: Is hiring paid for with a checkbook? There has always been a struggle for the best advisors among Swiss private banks, but things are particularly fierce at the moment. For this reason, warning voices are increasing in the financial center. “Lombard is starting Zug with zero assets,” says the head of private banking at a well-known banking player, watching the poaching bonanza from the sidelines: “It will take at least five years for them to recover their investment. And this is still an optimistic calculation.” He was very surprised by the aggressiveness some players in the market are currently displaying.

New recruitment target exceeded

EFG and Lombard Odier glossed over this: “The recruitment of new client advisors is a strategic priority for EFG for the organic growth of the bank,” says EFG. Lombard Odier makes a similar statement: They don’t understand the excitement, because the bank “hires bankers with a strong track record every year” to grow.

But raw numbers show increased activity. EFG is looking to hire between 50 and 70 new consultants each year. But in the first half of the year the bank hired 75 of them, a third coming from CS.

Headhunters explain that hunting people with checkbooks will not work in the short or medium term. “I pay higher salaries and advisors have fewer assets to start with than their old banks,” the expert says. Hiring ex-CS and ex-UBS employees will never be valuable just by poaching ex-customers. “The big banks are also very professional at managing the departure of client advisors,” says the headhunter.

CS has lost around 500 client advisors since October 2022, according to UBS boss Sergio Ermotti. So far, they’ve been able to take nearly $20 billion from customers to their new employers. It shouldn’t be more than that; Ermotti is “completely convinced” that the final number of exits will not be a multiple of 20 billion. On average, a departing advisor takes with him no more than 20 percent of client money.

How much money can bankers withdraw?

According to sources, internal risk analysis by UBS assumes that advisors can attract a maximum of 10 billion to 20 billion additional funds. In no case will defections call into question the status of the CS takeover.

CS currently has approximately 600 billion assets on its platform. Nearly $150 billion had previously flowed out due to the crisis, particularly in October 2022, when a tweet about the impending collapse of a global bank sent customers into turmoil. “It should certainly be possible for us to get back more from these funds than we lost with the departure of our advisers,” a senior UBS executive said. As a result, the balance is positive. In the third quarter, CS achieved net inflows of $3 billion, the first increase since the first quarter of 2022.

Ermotti set a long-term goal of raising $150 billion a year in new money following the successful integration; This means that every three years UBS will withdraw as much client money as Julius Baer manages.

But the impending integration is still causing unrest at the bank. Competitors also want to take advantage of this. A senior banker from Lombard Odier calculates: In normal times, an advisor could transfer 20 to 30 percent of client funds from the old employer to the new bank. “This value will be much higher during the integration process,” says the Lombard manager, “I think values ​​up to 50 percent are possible.”

As it is known, especially the super rich have more than one bank managing their assets. Therefore, CS and UBS are likely to have a lot of overlap in their customers. And they need to reorganize themselves and attract funds so that they no longer have such a high proportion of their assets with the new UBS.

Khan’s people: “We are very active”

On the surface, UBS elders are downplaying the problem. And they make fun of Geneva Lombard and its new location in Zug, where wealthy entrepreneurs and executives are groomed. A UBS employee asked, “If Lombard doesn’t even offer mortgages to this group of customers, what does it want to offer?” he quips.

The Lombards retort: ​​We don’t need this, because in Zug the business is carried on with the wealthy merchants of Glencore and Co. And above all, they want professional asset management.

Lombard’s new Swiss boss, Serge Fehr, is certainly highly respected at UBS: they would want to keep him, they say. His counterpart at UBS is August Hatecke; He heads asset management in Switzerland and global trading with financial intermediaries. Despite his 58 years of age, employees describe him as “hyperactive”. And it maintains a “direct line with customer advisors.”

Those around Khan also say: “We are all very active.” The fight for client money enters the next round.