UBS had 274 fewer U.S. financial advisers at the end of September than it did a year prior -- the result of a years-long strategy the firm has adopted to reduce costs and boost productivity.
And with that lower head count, the company said it saw record profitability in the past quarter.
According to earnings results released Tuesday, UBS had 6,353 full-time financial adviser positions in the U.S., down 4% from the 6,627 at the end of the third quarter of 2019. In the U.S., the company’s pretax profit was $39 million higher in the third quarter compared to the same period in 2019, reaching $371 million, according to the earnings report.
Profitability increased even as operating income fell, dropping by $86 million in the U.S., “mainly driven by lower recurring net fee income as higher invested assets were offset by lower margins, reflecting shifts toward lower-margin funds and advisory mandates, and lower net interest income, mainly due to US dollar rate headwinds,” the company stated in the report.
The company “made it clear in 2016 that [it] planned to gradually reduce advisor headcount,” a spokesperson said in a statement. “We remain focused on quality not quantity, selectively recruiting high-producing advisors with a book of business aligned to our overall [high-net-worth] and [ultra-high-net-worth] strategy.”
The reduction in the number of advisers shows that “overall advisor headcount has no correlation with overall profitability,” with the average income per adviser at the firm being $1.4 million, the spokesperson stated.
By comparison, in 2011, UBS had a total of 9,150 U.S. advisers, but at the time it posted net losses of about $150 million in a year, according to figures provided by the company.
In July, the company signaled plans to shut down its high-end U.S. private bank for wealthy clients. That decision take effect next year and could affect the ability of advisers to build new relationships with a coveted client base, though it isn’t clear how many U.S. advisers are affected.
Even as it keeps its adviser head count low, UBS likely faces pressure to retain experienced financial professionals, as it avoids taking on new ones through recruiting, which can be costly.
The company is also changing the legal structure of its international wealth management unit, which reportedly will allow UBS to bump up its loans business in potentially higher growth markets outside of Switzerland, Bloomberg reported in August.
Six apartment deals, one "big account," and $2.7M in undocumented insider loans. Now the lawsuit lands
The Illinois order refers to Brandon Ellington’s investment program as a “Ponzi-like scheme.”
But the Amazon executive chair seems to want it both ways, arguing that taxing the ultra-wealthy won't help struggling Americans.
Northern Trust planning leader sees the bill extending qualified charitable distributions to employer plans as a potential positive step — but advisors shouldn't overlook bigger holes in the strategy.
Markets will always create reasons for investors to worry. The advisor’s role is not to predict uncertainty, but to help clients understand why volatility should not derail a well-built financial plan.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
