At UBS, wealth management shines with record profits

UBS Wealth Management Americas achieved record profits, assets and revenue per financial adviser in the second quarter, its parent company, UBS AG, said today.
The U.S. retail unit of the Swiss-based financial services giant earned a pretax profit of $258 million, up 3% from the prior quarter, and up 21% from last year’s second quarter.
Revenue reached $1.79 billion, a 3% increase from the first quarter, and up 13% from the second quarter of 2012. Annualized revenue per financial adviser was $1.01 million, up 3% from $984,000 in the first quarter and a gain of 12% from $905,000 as of June 30, 2012. Invested assets per financial adviser, at $126 million, were flat from the prior quarter but ahead 11% from $114 million year-over-year.
Revenues in the U.S. retail business increased “mainly as a result of higher managed account fees on higher average invested assets,” in addition to improved interest earnings, according to a statement from UBS.
The financial results are “just more validation of the turnaround from the legacy [executive] team to [retail chief Robert] Mulholland’s team,” said recruiter Danny Sarch, who works with UBS. “Turnover has slowed, they’ve brought in more people to grow it, and removed obstacles” to doing business.
In the second quarter, financial adviser head count edged up to 7,099 from 7,065 in the first quarter.
Mr. Mulholland, a Merrill Lynch & Co. Inc. veteran like his boss, Robert McCann, chief executive of the UBS Wealth Management Americas division, took over in 2009 when UBS AG was ensnared in a tax-evasion scandal.
The company has since restructured globally to focus on wealth and asset management, while paring back on investment banking activities where the firm had suffered embarrassing losses.
Advisers at the firm brought in net new money of $2.8 billion in the second quarter. That was down from $3.8 billion a year ago and $9.2 billion during the prior quarter.
Total assets at the firm were $892 billion, up by $1 billion from the first quarter, and 12% more than a year ago.
Tax payments typically make the second quarter a slow period for asset gains.
UBS said its U.S. retail business has had 12 straight quarters of positive inflows.
For UBS AG overall, net profit for the quarter was $741.3 million, down 30% from the prior quarter but up 31.7% from a year ago. Revenue was $7.9 billion, down 5% sequentially but up 15.4% from a year ago.
The firm took a $929.3 million pretax charge for the quarter “for litigation matters and certain other significant provisions, and an impairment of financial assets as the firm continued to address issues from the past,” UBS AG said.

Related Topics: Wealth Management