The chairman and chief investment officer of Legg Mason’s wealth management unit is retiring following a steep decline in performance over the past three years in which assets fell from $31bn to $3bn (€2.3bn) by the end of 2008.

Bruce Sherman had stepped down last month as chief executive of Florida-based Private Capital Management, passing on the role to Gregg Powers who had served as president and portfolio manager of the wealth manager since Legg Mason acquired the business in 2001 for $682m. Powers will take over Sherman's responsibilities.