UBS Recruited Fewer Than Two Dozen U.S. Advisors This Year, Executive Says
UBS Wealth Management officials have said they continue to selectively recruit high-producing brokers in the U.S. while keeping a tight rein on expenses, but the inflow of advisers year to date has been sparse.In a presentation to his brokerage force managers on Monday, U.S. wealth management head Jason Chandler said UBS in the first five months of 2019 added 22 experienced U.S. advisors who were shepherding around $10.3 billion in client assets and producing about $47.1 million at their former firms, according to people on the call.
“That’s obviously not a lot for a major wirehouse firm,” Louis Diamond, a New York-based recruiter with Diamond Consultants said of the new-broker count. “It definitely fits with the narrative about selectively recruiting.”
UBS AG Chief Executive Sergio Ermotti said on an earnings call in April that the company has deliberately shifted its growth strategy in the U.S. from offering recruiting loans and other incentives that were “basically diluting earnings” to focusing on retaining experienced brokers. Both broker count and customer assets in the U.S. fell in this year’s first quarter.
UBS does not disclose its advisor retention figures, but the new recruit totals cited by Chandler are far short of the 109 advisors who left UBS between last November and late April, according to an internal report viewed by AdvisorHub.
The 22 hires through the start of June also are on track to trail the 178 brokers that UBS hired in the U.S. in 2016, the last year in which it disclosed the number in its annual report. (In 2014 it added 451 advisors and 389 in 2015.)
A UBS Wealth Management USA spokesman did not respond to a request for comment on the year-to-date hiring numbers.
It is unclear whether Chandler included in his new-arrival analysis three Goldman Sachs advisors in Texas who were producing $21 million on $6.6 billion in assets.The Dallas trio is on garden leave and have not officially started at UBS, according to their BrokerCheck records. If they are in the Chandler count, they would represent more than half of the assets and about 45% of the production that he cited.
UBS as of the end of this year’s first quarter employed 6,790 brokers in the U.S., Canada and Latin America, down 166 from March 31, 2018, according to the Swiss banking giant’s earnings report.
The bank does not break out its Americas headcount, but brokers at the firm said their internal peer rankings indicate that UBS employs about 6,275 advisors. That is less than half the size of the force at Morgan Stanley Wealth Management, Merrill Lynch Wealth Management and Wells Fargo Advisors, UBS’s wirehouse competitors.
UBS Americas President Tom Naratil three years ago spelled out a slimmed-down recruiting strategy aimed at whittling down a $3-billion-plus balance of “forgivable” recruiting loans on the Swiss bank’s balance sheet. As of the end of the first quarter, the loan balance was $2.49 billion, down 12% from 12 months earlier.