UBS Wealth Management Americas saw profits slip 3% year-over-year, due in part to financial advisor compensation, according to the firm's latest earnings report.
The Zurich-based firm said advisor compensation grew 8%, rising to $742 million from $690 million. Recruitment-related costs also rose 8%, reaching $184 million from $171 million.
Revenues overall grew 7% to $1.89 billion, from $1.78 billion, while pre-tax profits for the division fell to $238 million for the second quarter, from $245 million for the same period a year ago.
Meanwhile, revenue per financial advisor was up 6%, increasing to $1.068 million from $1.005 million. Advisor headcount grew by six from the previous quarter, for a total of 7,119.
The Americas division reported a net new money loss of $2.5 billion, which the company attributed to client withdrawals due to seasonal tax payments. Invested assets topped $1 trillion for the first time, up from $892 billion for the year-ago period.
Companywide, the Swiss firm reported that net profits grew 15%, increasing to 792 million Swiss francs for the second quarter from 690 million francs for the same period a year earlier.
Earnings-per-diluted share rose 17% to 0.21 francs. Revenues slipped 3%, dropping to 7.1 billion francs from 7.3 billion francs. But a 7% drop in expenses offset the revenue losses. Expenses fell to 5.9 billion francs from 6.3 billion francs.
The company's global wealth management division, which excludes the Americas, said pre-tax profits were down 36%, falling to 355 million francs from 557 million francs. The unit's expense climbed 12% to 1.5 billion francs from 1.3 billion francs. Meanwhile revenues decreased 2%, slipping to 1.92 billion francs from 1.95 billion francs.
The division reported 10.7 billion francs in net new money, of which the Asia Pacific region contributed 8.9 billion francs. Europe excluding Switzerland had negative outflows of 0.6 billion francs.
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