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UBS Wealth Sheds Assets But Files Profit Jump

July 31, 2017

Client assets may have drained out of UBS Wealth Americas but the unit has recorded a 17% jump in pretax profits, according to Q2 results filed by the firm.

The American wealth management arm of the Swiss financial firm reported $330 million in pretax profit – a 17% increase over the year prior. The company also touted its broker productivity, which at $1.2 million is leading the financial advice industry, according to industry website AdvisorHub.

Nonetheless the unit had $6.4 billion in net outflows in the second quarter, which the company blamed on a reduction in recruiting experienced brokers, according to the website.

UBS said last year it would cut broker recruitment by 40% and focus instead on existing advisors. The company also said $3.3 billion was pulled out for tax-related reasons.

UBS Wealth Management Americas shed 54 advisors in the second quarter, according to the website. As of June 30 the unit had 6,915 advisors – a net drop of 230 brokers over the year prior, AdvisorHub writes. At the same time, broker compensation expenses jumped 15% over the previous year to $830 million, according to the website. The bank attributed the added expenses to the revamp of its compensation grid as well as the higher revenue brought in by its brokers, according to its results statement.


UBS’s results have prompted some analysts to speculate the firm could weigh selling off its U.S. wealth management operations entirely, the website claims. The bank didn’t respond to AdvisorHub’s request for comment.

Meanwhile, UBS’s wealth business outside of the U.S. had $14.1 billion in inflows, according to its results statement. And UBS’s U.S. rivals Merrill Lynch and Morgan Stanley have both posted healthy growth in wealth management assets, despite both clamping down on large signing bonuses in recent months.

By Alex Padalka
  • To read the AdvisorHub article cited in this story, click here.