|Jürg Zeltner, chief executive of UBS Wealth Management|
UBS on Thursday announced that Jürg Zeltner, chief executive of its wealth management business, will step down at the end of the year, in the second recent unexpected senior departure at a top Swiss private bank.
At the end of November, Julius Baer announced that Boris Collardi, its chief executive, would be leaving to join Pictet.
No reason was given for Zeltner’s departure or what his next move would be. Sergio Ermotti, chief executive of UBS, said in a statement that Zeltner had made “outstanding contributions” to the bank and that he wished him all the best.
UBS said his replacement would be Martin Blessing, the one-time chief executive of Commerzbank, who had been running UBS’s Swiss banking business since September 2016. Axel Lehmann, group COO, will be stepping into Blessing’s role.
It’s a loss to UBS, and indeed the wealth management industry, if Zeltner, aged just 50, chooses to pursue a different career path. Well-liked and respected by both clients and colleagues, Zeltner has often been described as injecting a much-needed level of care back into banking.
He took on the role of president of the international wealth business in 2009 – everything ex-Switzerland and the US – at terrible time for UBS, which was reeling from the global financial crisis and also had US tax-evasion allegations hanging over it.
The bank was having a near-death experience and the challenges were immense,” says Zeltner. “If I had tried to do it alone, I would have failed. It was a very humbling experience- Jürg Zeltner
The Swiss bank’s reign as world’s leading wealth manager looked well and truly over – that role was Credit Suisse’s or any other large private bank’s for the taking – but Zeltner’s steady hand pulled the firm first back from the brink and then back into a manager in which people could place their trust.
He established the clear intention to move onshore. He insisted on greater transparency for clients to re-establish trust, including a move towards fee transparency. He initiated billion-dollar investments in technology to create a standard platform. He put advisory at the forefront of the wealth management offering, and he introduced the concept of the chief investment office (CIO), a central investment decision-making group that fed down throughout the firm.
That latter move became the industry standard with wealth managers around the world creating a CIO.
And Zeltner was always modest about his achievements. Last year he told Euromoney that the support he received from Ermotti, the board and shareholders enabled him to be bold.
“The bank was having a near-death experience and the challenges were immense,” says Zeltner. “If I had tried to do it alone, I would have failed. It was a very humbling experience.”
Zeltner came at his role from a position of wanting the best for the bank’s clients, and that made him something of a rarity even in the world of private banking.
Speaking to Euromoney last year, one UBS employee that worked closely with Zeltner said: “You can see just how much he cares about clients – not because he has to, but he clearly wants to. He knows the children of the clients, he knows about their lives, he sends Christmas cards and notes.”
That level of care also inspired Zeltner’s charge on impact investing. Meeting with Euromoney last year, he was candid how he saw the bigger picture, mentioning that if UBS could mobilize just 20% of the $2 trillion it managed towards social and environmental projects then the positive difference it could make would be astounding.
Under his watch in 2014, UBS launched UBS and Society – a cross-divisional umbrella initiative that covers all areas of sustainable investing and philanthropy, as well as the firm’s community interaction. Colleagues say he was often squeezing in travel to communities as research for impact projects. And Zeltner seemed particularly proud of the bank’s oncology impact investment fund that was launched in 2015.
Zeltner’s care for clients did not distract from the underlying performance of the bank. Colleagues say he was easy to support and trust.
“Jürg is always reading, he is always learning,” said one former colleague to Euromoney. “You know he’s done his homework. He knows the numbers inside and out. He has an ability to constantly anticipate revenue headwinds and adjust costs accordingly. Just look at UBS’s cost/income ratio.”
Indeed, it’s hard to find fault with Zeltner’s management given UBS’s Wealth Management business not only rebounded but has continued to grow under his watch. In the bank’s last earnings report in October, UBS announced a year-on-year rise of 14% in net income – although it did come in lower than estimates.
Some analysts point out that Zeltner had not been as aggressive in expanding in Asia as some of his peers, and that its technology developments had stagnated compared with others.
That’s a challenge Blessing will now take on, and it will be interesting to see if he is more able to accelerate UBS’s performance in these areas.
There is the sense that UBS has, after initially making such radical improvements under Zeltner, become a little too conservative of late, and dallies on changes that Credit Suisse under CEO Tidjane Thiam and head of wealth Iqbal Khan is willing to make more quickly.
Even Zeltner’s role felt a little stifled towards the end – it was clear he would never be given the US business to oversee, and Switzerland was considered its own animal. While given a clear mandate to run his part of the firm by Ermotti, it was not clear what his next step would be – especially as Ermotti seems comfortable at the top of the bank.
In his interview with Euromoney last year as UBS was named best global private bank in Euromoney’s annual survey, Zeltner commented: “I don’t like to look back. The second I do, then it’s time to retire.”
Perhaps it is simply time for a new challenge for Zeltner. Speculation that he will replace Collardi at Julius Baer is rampant in Zurich, but those in the know on the Bahnhofstrasse consider it unlikely.
Indeed, close friends have often said Zeltner might one day seek a new challenge away from private banking – he spends a lot of his personal time on philanthropic ventures – which would be a loss for the industry as a whole.