UBS keeps focus on costs in US wealth management business

UBS keeps focus on costs in US wealth management business
UBS headquarters
Meanwhile, the bank is also investing in technology for its financial advisors in the United States.
JUN 12, 2025

UBS Group is continuing its focus on expenses in its United States wealth management franchise, including advisor pay, as the Swiss banking giant look to boost profitability over the next couple years. 

While some of its competitors operate with much higher margins in the upper twenties, UBS wealth management is shooting for a pre-tax margin in the middle teens over the next two to three years. 

Advisor pay, generated by fees and commissions charged to clients, is the largest cost for any wealth management business. 

“Turning to the US, we remain committed to increasing pre-tax margins to the mid-teens by 2027,” said Todd Tuckner, chief financial officer, at the Goldman Sachs European Financials Conference in Berlin on Wednesday.

“All the things I talked about in the fourth quarter, the various initiatives we’re undertaking, enhancing net interest income by building out our banking capabilities, more cost discipline, including better aligning financial advisor incentives with our group strategy, enhancing acquisition channels, particularly around assets of clients, all those things are a focus of ours,” Tuckner said. “We’re chipping away and keeping our head down but making progress.”

Meanwhile, the bank is also investing in technology for its financial advisors in the US. About a year ago, UBS Group appointed investment bank head Rob Karofsky to run its US business and jointly oversee wealth with Iqbal Khan, who previously had sole charge of the key wealth unit.

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.

In February, the Swiss bank reported it was expecting financial advisors to leave the firm after changes to the firm’s compensation plan. In May, UBS 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.

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