After reporting in February that it was expecting financial advisors to leave the firm after changes to the firm’s compensation plan, UBS on Wednesday reported a 3.2% year-over-year decline in the total number of advisors in its Americas region.
The drop in headcount totals 195 fewer advisors at UBS in the Americas at the end this March, when its advisors headcount totaled 5,884. A year earlier, the firm reported 6,079 advisors in the region.
Financial advisors are the lifeblood of any wealth management business because they drive revenue and the addition of clients. UBS financial advisors in the United States are on average among the highest producing in the industry in terms of total revenue.
Of course, UBS has financial bankers and financial advisors in Asia, Europe and across the globe, but its wealth management business in the United States has struggled to generate profits on par with its competitors Morgan Stanley and Bank of America.
Toward the end of last year, UBS said it was redrawing its pay plan for advisors and in 2025 would cut a bonus for teams that was unique in the industry, according to industry sources. It also cut rates on its pay grid that will squeeze advisors who are the lower producers of revenue, a long-running tactic by large firms to boost margins.
“Every time one of the big firms like UBS tinkers with the advisors’ compensation, some of them say, that’s it, that’s the last straw,” said Danny Sarch, an industry recruiter. “Those types of changes make advisors very cynical.”
UBS wealth management is shooting for a pre-tax margin in the middle teens over the next two to three years, while some of its competitors operate with margins in the high twenties.
“There's been broad support for our strategy, which is intended to better align advisor incentives with the strategic goals of the firm, and that's evidenced by the very strong same-store net new money,” said the Swiss bank’s chief financial officer Todd Tuckner during a call Wednesday to discuss its earnings with analysts. “We've seen perhaps the strongest net new money we've seen over many quarters in the first quarter.”
Net new assets in the quarter in the Americas, a key metric for any wealth management operation, reached $20.2 billion, up 47.4% compared to the first quarter of 2024.
“In terms of the [advisor] headcount, I would just say that our recruiting pipeline is robust,” Tuckner added. “There is some attrition that one can expect.”
Attrition is industry nomenclature for an advisor leaving one firm to start working at another.
The wealth management business in the Americas revenue increased 10%, or $276 million, to $3 billion driven by higher asset-based fees and transactions, the company reported.
Limra data shows RILAs and variable annuities outperforming, while fixed-rate deferred sales lag their 2024 highs.
The S&P 500's longest rally in more than 20 years came amid evidence of labor market resilience in the immediate wake of April's Liberation Day tariffs.
With membership in the "century club" expected to quadruple in three decades, joint studies from Nationwide and the TIAA Institute shed new light on people's planning blind spots.
The Watchman Group's Andrew Herzog has noticed his more left-leaning clients have been "looking to get out of the stock market, perhaps do more fixed income or go to cash" while his right-leaning clients are more comfortable keeping assets as they have them.
As you work with clients to navigate the current markets, stay grounded in their values and priorities.
From direct lending to asset-based finance to commercial real estate debt.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
