UBS wealth management profits up 16% in latest quarter

UBS Group AG said on Tuesday that its wealth management business in the U.S. and Latin America produced a pretax profit of $391.6 million over the three months ended in June, an increase of 16% compared with the same quarter a year ago. The increase was due to revenue growth and improving operational efficiencies, the company said. Meanwhile, the bank continues to carry through with the change in strategy announced two years ago to move away from recruiting experienced financial advisers, which can be costly and time consuming. Recruitment loans to financial advisers declined 13% in the quarter from a year ago, according to the company. UBS also reported a spike in deferred compensation to financial advisers as a rewards program known as GrowthPlus winds down. Created in 2010, the company reported an increase of $456 million — 81% — in the rewards program for advisers when compared with the same period a year earlier. The firm reported 6,937 advisers in the Americas at the end of June, 22 more than it had a year ago. UBS' strong wealth management results came despite net outflows of $7.1 billion of client assets from the Americas. The net money outflows for the quarter included higher seasonal tax-related outflows in the U.S., plus a single outflow in the Americas from a corporate employee share program, the company reported. In the U.S., UBS' advisers produced annualized revenue per adviser of $1.3 million, with assets per adviser of $182 million. "The strong performance of wealth management in the Americas quarter after quarter is a testimony to our strategy and contributes significantly to the success of UBS Group," said company spokeswoman Maya Dillon. Earlier this year, UBS created a unified Wealth Management and Wealth Management Americas business division, called Global Wealth Management.