Customers of UBS Wealth Management Americas withdrew a net $8.3bn in the second quarter, reflecting the bank's pullback from recruiting experienced advisers with big books as well as clients' seasonal need for cash to meet tax bills.
UBS reported a year-over-year decline of 248 financial advisers, or 4% of the global bank's financial adviser workforce in the Americas. The 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 $2.195bn from $2.4bn. Three years ago that figure stood at $3.234bn.
We realize that quality new net money is an important driver of sustainable growth in the business"
UBS has hired fewer than two dozen experienced advisors in the US in the first half of the year, executives told managers last month. Earlier this year, it hired a Goldman Sachs duo overseeing more than $6.6 billion in client assets.
Several sources said earlier this month that based on the performance metrics they review, US advisor headcount is around 6,185. It still reported record adviser productivity of $1.349m for the quarter.
UBS Americas has seen progressively greater declines in net new money in client accounts since withdrawing from active recruiting two-and-a-half years ago, UBS Group AG chief financial officer Kirt Gardner acknowledged in a conference call to discuss earnings. Net new money fell $7.1 billion in last year's second quarter and $6.1 billion in the comparable 2017 period.
"We realize that quality new net money is an important driver of sustainable growth in the business," Gardner said, noting that client wealth asset flows grew in UBS's geographic regions outside the Americas. "We are focused on improving this metric."