After reporting in February that it was expecting financial advisors to leave the firm after changes to the firm’s compensation plan, UBS on Wednesday reported a 3.2% year-over-year decline in the total number of advisors in its Americas region.
The drop in headcount totals 195 fewer advisors at UBS in the Americas at the end this March, when its advisors headcount totaled 5,884. A year earlier, the firm reported 6,079 advisors in the region.
Financial advisors are the lifeblood of any wealth management business because they drive revenue and the addition of clients. UBS financial advisors in the United States are on average among the highest producing in the industry in terms of total revenue.
Of course, UBS has financial bankers and financial advisors in Asia, Europe and across the globe, but its wealth management business in the United States has struggled to generate profits on par with its competitors Morgan Stanley and Bank of America.
Toward the end of last year, UBS said it was redrawing its pay plan for advisors and in 2025 would cut a bonus for teams that was unique in the industry, according to industry sources. It also cut rates on its pay grid that will squeeze advisors who are the lower producers of revenue, a long-running tactic by large firms to boost margins.
“Every time one of the big firms like UBS tinkers with the advisors’ compensation, some of them say, that’s it, that’s the last straw,” said Danny Sarch, an industry recruiter. “Those types of changes make advisors very cynical.”
UBS wealth management is shooting for a pre-tax margin in the middle teens over the next two to three years, while some of its competitors operate with margins in the high twenties.
“There's been broad support for our strategy, which is intended to better align advisor incentives with the strategic goals of the firm, and that's evidenced by the very strong same-store net new money,” said the Swiss bank’s chief financial officer Todd Tuckner during a call Wednesday to discuss its earnings with analysts. “We've seen perhaps the strongest net new money we've seen over many quarters in the first quarter.”
Net new assets in the quarter in the Americas, a key metric for any wealth management operation, reached $20.2 billion, up 47.4% compared to the first quarter of 2024.
“In terms of the [advisor] headcount, I would just say that our recruiting pipeline is robust,” Tuckner added. “There is some attrition that one can expect.”
Attrition is industry nomenclature for an advisor leaving one firm to start working at another.
The wealth management business in the Americas revenue increased 10%, or $276 million, to $3 billion driven by higher asset-based fees and transactions, the company reported.
The two firms violated the Advisers Act and Reg BI by making misleading statements and failing to disclose conflicts to retail and retirement plan investors, according to the regulator.
Elsewhere, two breakaway teams from Morgan Stanley and Merrill unite to form a $2 billion RIA, while a Texas-based independent merges with a Bay Area advisory practice.
Analysis of four-year data shows average account balances nearly doubling among steady savers, with younger workers seeing the largest percentage growth.
Survey research shows just over half of Gen Xers satisfied with advice as retirement and economic anxieties take a toll.
Two reports reveal investor behavior including earlier participation of young Americans.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
