It's pure speculation, and simply not true. [ OR ]  It would be one of the best fits for Wells Fargo, and give it the ability to 'create greater scale'.  What some are saying is that Wells Fargo & Co. (WFC) may buy the U.S. wealth management unit of UBS AG, Switzerland’s biggest bank.

UBS is the world’s second-largest wealth manager after Charlotte, North Carolina-based Bank of America Corp., according to a survey by London-based Scorpio Partnership, which provides research and industry analysis. Wells Fargo ranks fourth behind Morgan Stanley, according to the survey. Wealth managers typically cater to clients with at least $1 million to invest.

    UBS Wealth Management.   Robert McCann, head of UBS's wealth management Americas unit, denied the speculation, adding, “I have not been part of any meeting with Wells Fargo.  This is a business that is an important part of UBS.  It’s an important part of our platform in the Americas and we like the wealth management business globally.”  Mr. McCann, 53, joined UBS from Merrill Lynch in late 2009 to help return the wealth management Americas division to profit.  The unit includes the former Paine Webber brokerage that the Swiss bank acquired in 2000.

Wealth management Americas, which aims for more than 1 billion francs ($1.13 billion) in annual pretax earnings, reported Q1 profit of 111 million francs after a loss of 130 million francs for all of 2010.  The unit has seen 3 consecutive quarters of net new money additions after clients had pulled net 40.5 billion francs over the previous 9 quarters.

    Wells Fargo & Co.   However, many like the combination.  Keefe, Bruyette & Woods analysts Frederick Cannon and Brian Kleinhanzl recent noted that an acquisition of UBS’s U.S. wealth management unit would be “one of the best fits” for San Francisco-based Wells Fargo to expand its business.  And, Wells Fargo is looking for an acquisition to bolster a unit that Chief Executive Officer John Stumpf has called “sub- optimized.”  

A purchase of UBS’s unit also would give Wells Fargo the ability to “create greater scale” in a highly fragmented brokerage industry, the analysts wrote.  Wells Fargo ranks third among U.S. retail brokerages with about 15,200 advisers.   Vince Scanlon, a Wells Fargo spokesman, declined to comment.      [Bloomberg, 5/19/11]