UBS' net asset inflows into its Americas unit stagnated and its advisor headcount fell in the second quarter, underlining ongoing struggles for the international banking giant's U.S. wealth business.
The firm reported Wednesday that $900 million in net new assets moved into its Americas unit, which includes Canada and Latin America, during Q2. While that marked an improvement from the $3.5 billion outflow in the same period last year, it was still a steep decline from the $14 billion that poured in during the first quarter.
The U.S. deadline for filing income-tax returns this year was April 15, and UBS said it had roughly $10 billion in tax-related outflows.
"Exclusive of [seasonal tax outflows], the contribution that the U.S. business made in the quarter was actually quite strong," Ermotti said on a call with analysts in Zurich, Switzerland, where the firm has its headquarters. "We're doing all the things that we believe are the right things to do to grow profitability in that business, including recruiting."
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Advisor departures' 'lag effect' on asset inflows
After losing many large teams
Even with that new blood and attempts to
Todd Tuckner, UBS chief financial officer, said the departure of advisors is having a "lag effect" that may weigh on the Americas unit's asset inflows over the next few quarters.
"This said, we're actively recruiting and investing in teams aligned with our profitability ambitions," Tuckner said on a call with U.S. analysts. "And it's important to note that rotation among financial advisers remains elevated across the industry, given record valuations. But we continue to expect these dynamics to normalize in our book over the course of 2026."
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Americas wealth unit's assets, revenue and profits
Despite the decline in net asset inflows, the Americas unit's total for client assets was up nearly 11% year over year to $2.4 trillion. UBS defines client assets not just as holdings in brokerage and wealth management portfolios, but also savings, institutional and other types of accounts.
The Americas unit's total for assets that generate wealth-management fees and similar income was also up nearly 11% year over year, approaching $1.25 trillion at the end of the quarter. Firms particularly prize fee-generating assets for their ability to provide steady streams of revenue.
The unit's revenue was up 15% year over year to $3.36 billion and its operating profit by a whopping 47% to $534 million.
Many of UBS' recent changes to its Americas unit — including those to advisor compensation — have been aimed at improving the division's profit margin. The unit's cost-to-income ratio continued moving in the right direction in the second quarter, falling to 84.1% from the previous three months' 87.4%.
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Global wealth results
In all its global wealth management businesses, UBS reported its invested assets total was up nearly 10% year over year to just over $4.94 trillion. The businesses' collective revenue rose by 12% to $14.2 billion, and their profits before taxes were up 43% to nearly $3.68 billion.
The global wealth management units ended the quarter with 9,173, a decline of about 4% from a year ago. UBS explained in a footnote that the second-quarter total was affected by its decision to change its classification of certain advisory roles.
