UBS Americas wealth business posts record quarterly profit

Tue Jul 30, 2013 12:55pm EDT
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By Ashley Lau

NEW YORK (Reuters) - UBS AG's UBSN.VX(UBS.N: Quote) Americas wealth management group on Tuesday reported a 21 percent jump in quarterly pre-tax profit over the prior-year period, as financial adviser productivity picked up and invested assets rose to record levels.

Second-quarter pre-tax profit at the Swiss bank's Americas brokerage operation totaled $258 million - accounting for roughly 24 percent of UBS AG's total pre-tax profit during the quarter.

"They're continuing to invest in the Americas," said Sophie Schmitt, senior wealth management analyst at Boston-based Aite Group, pointing to the firm's willingness to spend to hire top advisers whose large client asset pools generate significant revenue for UBS.

"There is a lot of competition in this market, as assets are flowing from traditional wealth management providers to online brokerages and independent registered investment advisers," Schmitt said. "Firms really need to invest."

The Swiss bank's U.S. brokerage business, formed out of the old PaineWebber brokerage and run by former Merrill Lynch wealth chief Robert McCann, said invested assets were $892 billion at the end of the second quarter, up 12 percent from last year.

Managed account assets increased to $273 billion, accounting for 31 percent of total invested assets at the end of June. Higher managed account fees off of those assets helped drive profit growth during the quarter, UBS said.

Revenue per broker at UBS Wealth Management Americas rose to more than $1 million, up 12 percent from $905,000 last year, topping adviser productivity of major competitors.