UBS Americas Wealth Management Faces Significant Outflows Amid Advisor Departures
UBS’ Americas wealth management arm experienced a substantial $8.6 billion exodus of client assets in the third quarter, marking a stark reversal from the previous year’s inflows. The outflows have intensified in recent months as the firm implements cost-cutting measures and revamps its compensation structure, leading to an increasing number of advisor departures.
Advisor Headcount and Asset Outflows
The firm’s advisor headcount showed a slight recovery quarter over quarter but was down 3.5% compared to the same period last year, with 5,779 advisors, as reported by the Swiss firm. The Chief Financial Officer, Todd Tuckner, had previously warned analysts about potential staff departures following changes to the compensation structure, including a reduction in payout rates for wealth managers generating lower revenue.
These adjustments have resulted in significant losses for UBS as major teams continue to leave the firm. For instance, Janney Montgomery Scott recently recruited a two-advisor practice that previously managed $350 million at UBS, while RBC Wealth Management attracted a six-person team that had overseen $1.1 billion for UBS.
The Americas wealth management unit, which includes the U.S., Canada, and Latin America, reported $8.6 billion in client asset outflows during the third quarter, a sharp contrast to the $8 billion in inflows during the same period last year.
Impact on UBS and Strategic Changes
A recent analysis by recruiting firm Diamond Consultants revealed that 169 advisors left UBS in the first half of 2025, with several high-value teams departing. To address the ongoing departures, UBS introduced modifications to its pay policies for 2026, aiming to incentivize advisors based on revenue generation and client acquisition.
Despite the outflows, UBS Americas’ pretax profit increased by 26% year over year to $416 million, supported by a 9% revenue growth to $3.1 billion. Costs as a percentage of revenue decreased slightly, while assets under management rose by 9% to nearly $2.3 trillion due to market uptrends.
UBS’s Strategic Move: National Bank Charter Application
UBS executives highlighted the significance of the firm’s application for a national bank charter in the United States, which is expected to be approved in 2026. Once granted, the charter will enable UBS to offer enhanced banking solutions to U.S. clients, aligning with its long-term strategy to expand client offerings and create sustainable value.
Competitors like Citi have reported substantial inflows to their wealth management divisions, partly attributed to transfers from retail bank clients. UBS CEO Sergio Ermotti emphasized the importance of securing the national bank charter to attract clients currently banking with other institutions, setting the stage for future growth opportunities.
UBS remains optimistic about the future, with ongoing efforts to retain advisors and enhance its service offerings. The firm has enrolled advisors in programs like the Aspiring Legacy Financial Advisor Program (ALFA) to facilitate practice transitions and support retiring advisors.
Conclusion
While UBS continues to face challenges with advisor departures and asset outflows, strategic initiatives like the national bank charter application and revised compensation policies demonstrate a commitment to driving growth and enhancing client relationships. By adapting to market dynamics and focusing on long-term value creation, UBS aims to navigate the evolving wealth management landscape successfully.
Source: Here
