UBS to close U.S. private bank to simplify operations

An illuminated logo sits on display above the entrance to a UBS Group AG bank branch at night in Bern, Switzerland, on Sunday, April 19, 2020. A UBS appeal of a record 4.5 billion-euro ($4.9 billion) French fine for helping clients stash undeclared funds in offshore accounts was postponed over concerns related to coronavirus pandemic, according to people familiar with the case.Photographer: Stefan Wermuth/Bloomberg
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UBS will cease offering wealth management services through its private bank in the U.S., and shift clients and staff to other, larger wealth management units.

In a memo last month, UBS executives explained the move to employees as an effort to simplify operations.

The firm, which has $2.8 trillion in assets in its global wealth management business, has been streamlining its business and cutting expenses. Earlier this year, it cut approximately 500 jobs in the global wealth unit and stripped out some layers of bureaucracy.

In the U.S., UBS has experienced advisor attrition even as it has boosted assets and productivity. Recruiting expenses have fallen since the wirehouse cut back on hiring efforts in 2016 and left the Broker Protocol in 2017. UBS currently fields about 6,400 advisors in its Americas wealth management unit, which includes staff in Latin America and Canada, according to the company’s second-quarter earnings report. That figure is down about 200 advisors from the same period a year ago.

The firm does not break out the overall headcount into specific geographies. It also does not provide how many private bankers it has, but it is generally regarded to be a small business compared to its traditional wirehouse operations.

A spokesman declined to say how many private bankers work at the company.

By offering comprehensive wealth management services in the U.S. through UBS Financial Services and UBS Bank, we can provide all of our clients with a superior experience on a single platform, while also simplifying how we operate,” the spokesman said in a statement.

The private bank’s client advisors and their teams can transition to the wirehouse operations, according to the memo.

The changes — which will be effective Jan 1, 2021 — also occur against a backdrop of unprecedented economic turmoil wrought by the coronavirus pandemic.

UBS’ Americas unit reported pretax profit dropped by $135 million to $227 million for the second quarter, mirroring declines at rival wealth managers Morgan Stanley and Wells Fargo. The unit reported $100 million in net new money. Invested assets, at $1.369 trillion, were up $48 billion from the year-ago period.

CityWire first reported news of the operational changes.

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