Over the past half-decade, UBS’s trend of downsizing has taken a heavy toll on the company’s outstanding recruiting loans to financial advisers.
The cable company reported $ 1.872 billion in recruiting loans for the fourth quarter. This is almost half of the $ 3.03 billion reported by UBS for the fourth quarter of 2016, the year the company announced plans to cut hiring, citing high costs and a willingness to shift resources to d other operations.
The decline in recruiting activities and costs has been accompanied by a decrease in the number of advisers. UBS’s wealth management business in the Americas, which includes a small number of advisers in Latin America and Canada, seconded 6,305 advisers at the end of last year, up from 6,549 in 2019. UBS has declared 7,025 advisers in its wealth management business in the Americas at the end of 2016 (In the years since, the company has made changes in the way it communicates the numbers of its wealth management business).
In 2019, then CEO Sergio Ermotti pointed out that the company’s strategy “plays on the bottom line” and that “recruiting loans and all the arrangements made in the United States to recruit people dilute essentially the profits ”.
Of course, UBS always selects advisers for high net worth and high net worth clients. Last year the company recruited an $ 11 billion team by Merrill Lynch in Charlotte, NC and a $ 9 billion team by JPMorgan in Atlanta.
According to the Swiss bank, UBS’s Wealth Americas unit’s pre-tax profit rose $ 135 million to $ 386 million. Revenue increased $ 88 million to $ 2.382 billion in part due to higher invested assets.
UBS said its region of the Americas recorded a pre-tax profit of $ 1 billion for 2020.
The cable company reported $ 1.568 trillion in invested assets, up from $ 1.403 trillion a year ago, which is an 11% increase. The company’s advisers brought in $ 1.4 billion in net new money, up from $ 9 billion in outflows last year.