UBS advisor headcount drops 4%, firm notes $8B in outflows
The advisor ranks at UBS are shrinking.
The wirehouse reported that headcount in its Americas wealth management unit fell to 6,689 for the second quarter, down from 6,937 for the same period a year ago. The figure includes advisors in Canada and Latin America.
UBS dramatically reduced hiring efforts in the U.S. roughly three years ago, an effort that greatly reduced its recruiting expenses. Recruitment loans to advisors fell to $2.195 billion from $2.4 billion. Three years ago that figure stood at $3.234 billion.
To be sure, UBS continues to recruit selectively. Earlier this year, it hired a Goldman Sachs duo overseeing more than $6.6 billion in client assets. But the company’s strategy has been less reliant upon sourcing talent from elsewhere and more on positioning itself as a premier institution for elite advisors and the wealthy clients it serves. UBS reported record advisor productivity of $1.349 million for the quarter.
Still, its U.S. business faces the same industrywide pressures as its rivals: an aging advisor workforce and a small but steady stream of wirehouse brokers bolting to open their own independent shops.
The wirehouse’s latest litigation suggests other everyday activities of defectors could come under scrutiny.July 11
The firm had cut back on hiring efforts in 2016, citing exorbitant costs.June 6
Wells Fargo, for example, has also reported falling headcount. The bank has suffered reputation damage due to a fake accounts scandal and massive regulatory fines. With 13,799 brokers, Wells Fargo had 427 fewer advisors than it did one year ago and 1,287 fewer than it had for the third quarter of 2016.
UBS’s Americas unit reported outflows of $8 billion during the quarter, which it attributed to primarily to seasonal tax-related outflows of $5.1 billion. Invested assets rose slightly to $1.32 trillion from $1.25 trillion for the year-ago period.
Overall, the company said client assets rose to $2.7 trillion from $2.6 trillion for its global wealth management business. Pretax profit increased 1% to $874 million due to higher costs and lower net interest income.