Why Switzerland's largest bank opted for a radical change – and how consultants are taking over the C-suite at the world's largest wealth managers.

All eyes are on the world’s largest wealth manager as it enthrones a new co-head for its flagship private banking business. As they should be: Iqbal Khan’s appointment may well be an inflection point for UBS. It is certainly a marked departure from its previously iterative strategy. It remains to be seen whether he has the leeway to ask some uncomfortable strategy questions at UBS.

To say Khan is a natural successor to outgoing wealth head Martin Blessing is not just erroneous, it is missing the point. His appointment is a quantum leap in the Swiss bank’s lifecycle, short-circuiting its previous coda of relationship-focused senior bankers, more often than not from within a static talent pool.

Snakes and Ladders Life

Charismatic though they may have all been, much of their power came from their extensive networks amongst colleagues and clients. The connections kept them safe through the snakes and ladders game that is life at a large bank.

Khan begins in October with an intricate knowledge of UBS from his days it the Swiss giant's lead auditor at EY, but with no internal power base and a co-head, Tom Naratil, who is a UBS lifer and known «political animal».

Then Consultant, Now Banker

Khan is the new breed of banker that has taken its place at all three of the top Swiss banks: Tidjane Thiam at Credit Suisse; Philip Rickenbacker at Julius Baer, and Blessing himself at the industry leader. Former consultants who honed their craft with top-drawer consultancies like McKinsey (Thiam and Rickenbacker)  and EY (Khan), all three are balance-sheet wizards who are more likely to focus on return-on-equity than they are on relationships.

Each has earned a reputation for being detailed-oriented and far better acquainted with the fine print of leading their respective banks than their predecessors. «Meticulous in the extreme,» is how one former colleague describes Khan.

Rickenbacker – who is variously described as «a manager more than a banker» and «analytical and methodical» – rose from relative obscurity to best Yves Robert-Charrue, a popular banker who owns  Julius Baer's key relationships in continental Europe and the U.K.  

Poster Boy Thiam?

«Tidjane is the poster boy for the next generation of Swiss bank CEOs,» says a former board member at a leading Swiss bank. «It is now the fashion,» he says, for boards to appoint efficiency-focused, politically-neutral and consensus-building leaders who have crystal clear short term strategies that will improve returns, rather than a long-term but vague vision for the bank.

«They have to, the pressure is very high from shareholders as well as institutional investors,» he says, «to make a change.» Those who have seen Thiam in action at a shareholder’s meeting or on an investor call will find it difficult to argue that he is not completely in control of often difficult conversations.

I have seen him playfully chide a journalist for not picking up on what might be unusual about an investment amortized over two financial periods. «Yes,» laughs the former board member, «the old guard were focussed on the regulator and key client relationships, not on shareholders.»

 Hidebound vs Shaking Up

Up to this point, the crucial difference between the two Swiss banking leaders was their relative «degree of democratization,» says one senior UBS banker. Credit Suisse was seen as entrepreneurial, UBS as process-driven. For an allegedly bureaucratic bank to have someone as unabashedly profit-driven as Khan is nothing short of a game-changer.

Although they have yet to meet him, several of his newest colleagues expect him to attempt to push through «more change in a year than we have had in ten years.» The question then remains, will it be change for it's own sake or change for good?