Menu Close

Tough Quarter for UBS U.S. Wealth

Photograph by Fabrice Coffrini/AFP via Getty Images

UBS’s wealth management business in the Americas reported net declines in financial advisors and new assets during the fourth quarter, although pretax profits surged in the global wealth management unit, of which the Americas business is a part.

Newsletter Sign-up

The news comes as the Swiss bank is cutting jobs and reorganizing global wealth management with the aim of speeding local decision making.

At the end of 2019, UBS’s Americas wealth management business, which primarily focuses on the U.S., had 6,549 advisors, down 78, or 1.1%, from the end of the third quarter. Headcount fell 301, or 4.4%, from 6,850 at the end of 2018. UBS and its wirehouse rivals are seeing their advisory ranks decline as they step back from aggressive recruiting, some advisors retire, and other advisors move to RIAs or join regional or independent broker-dealers.

Net new money declined $9.0 billion in the Americas. That included two single large outflows totaling $5.4 billion.

On the bright side, the Americas wealth management business reported reported invested assets of $1.4 trillion and record loan balances of $62.5 billion, driven by strong growth in mortgages. And the global wealth management business reported a pretax profit of 766 million, more than double the $327 million of the year-earlier quarter.

The parent bank’s fourth-quarter profits topped analysts’ expectations, helped by its investment bank, as our sister publication MarketWatch reports. But UBS missed key financial targets for all of 2019 and reduced its outlook for two important metrics: return on Common Equity Tier 1 capital and cost-income ratio. Shares traded lower Tuesday following the earnings news.