UBS saw decline in new client money in fourth quarter

Net new money was 5% less in Q4 compared with the year-ago period

Jan 22, 2019 @ 2:18 pm

By Bruce Kelly

As the market churned in the fourth quarter, UBS Group said on Tuesday that the amount of net new money in its wealth management business in the Americas declined by $3.6 billion in the final quarter of last year when compared with the same quarter a year earlier.

Invested assets in the Americas dropped to $1.2 trillion at the end of December, a 5% decline from the year before. The S&P 500 declined 6.2% in 2018, its worst performance since 2008 when the broad market index dropped 38.5% from the fallout in the credit crisis.

A year ago, UBS created a unified Wealth Management and Wealth Management Americas business division, called Global Wealth Management. Withdrawals at that key unit totaled almost $8 billion in the fourth quarter, with clients removing another $5 billion from asset management, according to Bloomberg.

"In wealth management, particularly when I look at our overall results, of course they are not up to our ambitions and our expectations," UBS CEO Sergio Ermotti told Bloomberg Television. Clients are taking a wait-and-see attitude amid the trade tensions, he said.

Pretax profits in the wealth management business in the Americas were $338 million, an increase of 16% year-over-year, the company said.

UBS was upbeat about its U.S. wealth management results.

"The contribution of the Americas continues to be integral to UBS's success," the company said in a statement. "Financial adviser productivity continues to lead the industry with $1.35 million per adviser, in the United States only, up 5% year-over-year."

UBS' headcount of financial advisers saw a slight uptick over the course of 2018. At the end of the year, UBS reported 6,850 brokers and financial advisers compared with 6,822 a year earlier, an increase of 28.

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