UBS' U.S. wealth management unit posts flat Q1 revenue but record managed account assets a bright spot

Managed account assets rose 3% to a record $361 billion, CFO Kirt Gardner said on Tuesday's earning call

May 3, 2016 @ 12:03 pm

By Christine Idzelis

Revenue at UBS Group AG's wealth management unit for the Americas in the first quarter was little changed from the first quarter a year ago, but the unit got a boost from a rise in managed account assets.

The division's managed account assets increased by 3% to a record $361 billion, representing 34% of its invested assets, UBS Group's chief financial officer Kirt Gardner said during UBS' earnings call Tuesday.

The unit's first-quarter revenue rose 1% from the fourth quarter to $1.9 billion due to higher net interest income from lending, as well as an increase in managed-account fees, according to Gregg Rosenberg, a spokesman for UBS. The division's adjusted pre-tax profit in the first quarter was $245 million, down from $293 million in the same period a year ago and up from $63 million in the fourth quarter.

The rise in revenue from the fourth quarter came amid market volatility that was partly blamed for declines at some competitors.

While the Swiss bank's U.S. brokerage business has about half the number of financial advisers at its Wall Street rivals Bank of America Merrill Lynch, Morgan Stanley and Wells Fargo & Co., the spokesman pointed to the strength of their production and invested assets per adviser.

“Our financial advisers continue to be the most productive among peers,” Sergio Ermotti, UBS Group's CEO, said during the earnings call.

Each adviser at UBS wealth management Americas represented an average of $147 million of assets in the first-quarter, up 1% from the previous three-month period, according to the spokesman.

The unit counted 7,145 financial advisers at the end of March, up five people from the fourth quarter and a 2% increase from the first quarter of 2015, the firm's earnings report shows.

The advisers produced an average $1.06 million of annualized revenue each in the first quarter, “slightly higher” than the fourth quarter, though down 2% from the first quarter of 2015, according to Mr. Rosenberg.

The Zurich-based firm saw invested assets at its wealth management Americas division rise 2% from the end of last year to $1.05 trillion due to “positive market performance” and a strong net inflow of new money, according to Mr. Rosenberg.

The unit, which focuses on ultra-high-net-worth and high-net-worth clients, reported assets were unchanged from the first-quarter a year ago.

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