UBS’ Americas advisor headcount and new asset inflows declined in the second quarter as changes to the firm’s compensation policies continued to drive a recruiting bonanza for its competitors.
In an earnings report on Wednesday, the Swiss financial giant said it ended the second quarter with 5,773 advisors in its Americas unit, which includes the U.S., Canada and Latin America. That was down by 111 advisors from the first quarter of 2025 and 229 from the second quarter of last year.
UBS Chief Financial Officer Todd Tuckner acknowledged in a call with analysts in February that recent changes to the firm’s compensation policies could lead to higher-than-normal headcount losses. Among other things, UBS lowered its payout rates for wealth managers on the lower levels of revenue production.
Since then, UBS’ losses have included a team that formerly managed $1.2 billion and went to Rockefeller, as well as three teams that had each separately managed more than $1 billion and moved to RBC Wealth Management. Just this past week, Merrill, Ameriprise and Raymond James all announced they had recruited advisors from UBS.
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‘Continued movement across firms and to the independent channel’
UBS has portrayed the changes as an attempt to better align pay incentives with long-range goals like improving its profit margins. Tuckner noted Wednesday that annual revenue production is now up by 90% of the advisors in UBS’ Americas unit.
“But in terms of headcount, look, the second quarter is typically seasonally more active in terms of [financial advisor] moves across the Street,” Tuckner said. “And the changes we’ve introduced … which I’ve highlighted previously, means that we could see some continued movement across firms and to the independent channel.”
Tuckner also made reference to UBS’ Aspiring Legacy Financial Advisor Program, of ALFA, which helps retiring advisors hand their practices down to colleagues.
“We’re actively recruiting,” Tuckner said, “and we’re also seeing more FAs commit to stay and retire at UBS than at any time since we’ve introduced this retention program several years ago.”
Asset outflows and an improving operating margin
Along with falling headcount, UBS reported Wednesday that $3.5 billion in net assets left the Americas wealth unit in the second quarter. In the earnings call, executives made no connection between the net outflow and declining advisor headcount; Tuckner said that Americas clients took out billions for tax-related expenses.
Many of the changes at UBS are aimed at raising the amount of money the Americas division gets to keep after subtracting expenses. That share of leftover revenue came in above 12% in the second quarter.
That showed an improvement for the figure from a year ago, when it was barely over 9%. But it still lagged far behind rivals like Morgan Stanley, which had a 28.3% operating margin in its second quarter.
UBS CEO Sergio Ermotti told analysts Wednesday that many UBS competitors are “benefiting from ancillary activities around their wealth management business, which contributes to a higher margin,” and that, “It’s going to be very difficult for us to close the gap to our peers.”
“But we can narrow the gap substantially, particularly when you look at the wealth management operation in the U.S,” Ermotti added.
Sale of the U.S. business?
“When I look at our U.S. operation, I think that it’s fair to say that in wealth management, we are not yet where we should be in terms of profitability,” Ermotti said. “But as you could see from the recent developments, we are tackling the issue. We are convinced that in the medium term, we will be able to achieve a double-digit mid-teens kind of return on pretax profit margins.”
Amit Goel, a research analyst at the investment bank Mediobanca, asked Ermotti how he and other executives would respond if they received an unsolicited offer to buy UBS’ U.S. wealth management business.
Ermotti declined to discuss hypothetical scenarios.
“This is a highly profitable business,” he said. “By the way, the U.S. operation benefits from this status as being an international player with strong capabilities, international capabilities that we bring to our U.S. clients.”
Invested assets, total revenue and profit before taxes
Despite the headcount dip and net assets outflows, UBS did report some bright spots for its Americas wealth business. Its fee-generating accounts, for one, gained $1.7 billion in net assets in the quarter.
That brought the total in those accounts to nearly $1.13 trillion. Fee-generating assets are particularly prized for their ability to generate stable streams of revenue.
All told, the Americas’ division ended the second quarter with nearly $2.2 trillion in “invested assets,” which includes fee-generating assets, savings and brokerage accounts and institutional assets, among other things. That figure was up nearly 10% year over year.
The Americas unit saw its total revenue rise by 6% year over year to $2.9 billion in the second quarter. Its operating expenses were virtually unchanged, and its profits before taxes were up by 47% to $364 million.
Global results
For UBS’ global wealth management business as a whole, invested assets rose by 12% year over year to roughly $4.5 trillion. That was driven in part by $23.3 billion in net new assets. Total revenue for the global wealth management business was up by 4% year over year to $6.3 billion and its operating profit up by 38% to $1.2 billion.
