Uncertainty about the future of Credit Suisse’s private banking arm in the United States is toxic for business. Long serving stalwarts are now leaving the bank – and apparently moving to UBS.
While the new strategy plans are still being finalized in the bank’s Zurich headquarters, Credit Suisse’s private banking arm in the US is showing signs of wear and tear.
Since rumors started circulating in September that CS Private Banking in the US would be sold, competitors have been exploiting the uncertain situation and recruiting CS client advisors in droves.
20 years’ service for CS
This week CS lost two top-class advisor teams and with them some 4.5 billion dollars in client funds, according to the finance website On Wall Street.
One of the teams appears to be moving to UBS. Headed by Max Bardeen in Boston, the team includes Ross Kennedy, Steve Michael and Richard Cantwell. Together they manage some one billion dollars in client funds and brought CS an annual turnover of six billion.
The departure is a bad signal. For more than 20 years this team of ‘lifers’ has been faithful to CS. The banking news portal Advisorhub reports that the recruitment of the Boston team was hotly contested. They received offers from Wells Fargo and Morgan Stanley but UBS won out in the end.
More changes on the horizon
Another CS team in Chicago moved to Merrill Lynch, taking with it some 3.5 billion in client funds. According to Advisorhub, more migrations can be expected. Negotiations are taking place with rival banks in Los Angeles and Texas.
The current uncertainty about the future is counter-productive for CS. If the Swiss bank sells its US private banking arm, the wave of departures among client advisors will lower the value significantly.
And in the current information vacuum (article in German), it is very difficult for client advisors to secure new business. No private client wants to bring their business to a bank if they don’t know whether or not it will be sold.
