UBS continues to cut loans to recruits, while increasing compensation to brokers

The wirehouse reduced recruitment loans 20% and increased bonus loans 68% in the first quarter

Apr 23, 2018 @ 2:37 pm

By Bruce Kelly

UBS is recruiting less and paying its brokers more.

The bank released first quarter earnings Monday, and in a news release reported that recruitment loans to financial advisers had declined 20% in the quarter when compared with the same period a year earlier. Meanwhile, its "other loans" — a form of deferred compensation — to existing advisers increased 68% in the first quarter.

Those results are in line with a change in strategy announced almost two years ago. That's when UBS Wealth Management Americas said it would shift strategies and focus efforts on retention of top-producing advisers while cutting back on recruitment.

In June 2016, the company said it would focus on a new operating model meant to drive organic growth "through an increased focus on adviser retention," according to Tom Naratil, the firm's president at the time and now co-president.

On February 1, UBS created a unified Wealth Management and Wealth Management Americas business division, called Global Wealth Management. This was the first quarter the company had reported under its new structure, making a picture of its operations to start 2018 less than clear.

For example, UBS Wealth Management Americas reported 6,822 brokers and advisers at the end of December. At end of March, the new Global Wealth Management Group reported 6,956 advisers in the Americas, for an apparent increase in the net number of advisers at the firm. However, due to the new group's combined reporting, it's not possible to tell whether such a comparison is accurate.

UBS has a longstanding goal of having 5,000 to 7,000 brokers and financial advisers in the United States.

Company spokeswoman Maya Dillon noted that, for the quarter, pretax profit at the Wealth Management Americas unit increased 19% to $400 million and advisers productivity increased 13% year over year.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Financial advisers highlight solutions to increase diversity and inclusion

These Excellence in Diversity & Inclusion award winners suggest short-term changes to help foster D&I in the financial advice profession.

Latest news & opinion

SEC commissioner Stein suggests Congress address differing broker, adviser standards

She said lawmakers may have to change 'solely incidental' language that lets brokers give advice.

Social Security and the fear of missing out

How to lower expectations when clients think they're owed a bigger Social Security benefit.

7 things advisers should do today to boost diversity and inclusion

Creating diversity and inclusion within financial advice firms is challenging, but these InvestmentNews Excellence in Diversity & Inclusion award winners have suggestions that firms can put into practice today

The midterm elections: What's at stake for financial advisers

A shift in control of the House could change the course of important issues, including the SEC advice rule, tax reform and retirement policies.

What to tell your clients after they've won the lottery

The current combined Mega Millions and Powerball jackpots are more than $850 million. What should you tell your clients if they have a winning ticket?

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print