UBS reports record pretax profit for wealth unit

UBS reported a record pretax profit of $371 million for its Americas wealth management business, up 12% from the same period a year ago.

The firm notched the growth even as headcount fell by a net 274 advisors to 6,353 for its Americas business. The figure includes advisors in Canada and Latin America, UBS reported Oct. 19.

The wirehouse’s advisor ranks have been shrinking in recent years. UBS cut back recruiting efforts in 2016 and left the Broker Protocol in 2017 as part of a strategy to shift resources away from poaching talent from competitors.

Recruitment loans to financial advisors at UBS have fallen precipitously, dropping to $1.8 billion for the quarter from $2.1 billion for the same period a year ago. The wirehouse reported $3 billion in recruitment loans at the end of 2016.

Still, UBS selectively hires advisors catering to high-net-worth and ultrahigh-net-worth clients. Earlier this month, the firm said it picked up a trio of brokers overseeing $400 million in client assets.

UBS said revenue for the Americas business decreased by $86 million to $2.235 billion, largely due to lower recurring net fee income. The firm reported outflows of $9.2 billion for the quarter. Total client assets stood at $1.4 trillion, up from $1.3 trillion for the same period last year.

At the start of October, UBS changed its method of billing clients for advisor fees. The wirehouse now calculates advisory fees on an average daily account basis rather than quarterly, an alteration made possible due to technology advances and the company’s partnership with Broadridge Financial. The firms are collaborating on a tech overhaul of UBS systems, with more changes planned for 2021.