For a long time, UBS’s private banking business served careerists as a stepping stone. Although outgoing manager Tom Naratil tried to break the trend, there are indications that it might not be so easy to do so.
UBS’ second quarter results for wealth management in the Americas region, which is its most important market in terms of volume, were not exhilarating. In fact, pre-tax profits fell by more than a fifth year-on-year to $397 million in the region due to low client activity and provisions for legal risks.
At the same time, the number of client advisors working in the region, which includes Canada and Latin America, remained stable amounting to 6,139 at mid-year 2022, compared with 6,218 advisors at the end of 2021.
According to a report by «Advisor Hub» however, which cited anonymous sources working at the bank, the actual headcount in UBS’s US wealth management business stands at just over 5,600, well below publicly reported figures for its Americas unit.
A UBS spokesperson declined to comment to the news outlet on the matter.
More not Less
Should the figure be accurate, UBS would have lost around 14 percent of its US advisor base since the beginning of 2018. The alleged decline contrasts starkly with the bank CEO Ralph Hamers’ dictum that the bank’s greatest growth potential lies in the Americas and Asia.
To leverage that potential, it will need more experienced staff, not less of them.
While outgoing GWM co-head Tom Naratil (pictured below) worked hard to harness staff costs within the US advisor business, as from October it will be up to Iqbal Khan, who takes over sole leadership of global asset management (GWM), to call the shots.
(Image: UBS)
Adjusting its Threshold
Naratil, sole head of Americas at the time, decided against engaging in a bidding war for talent but chose to reward existing advisors in order to retain them. When this tactic only worked partially, the bank shifted to targeting particularly successful advisors and intensified its junior banker training.
A higher turnaround among advisors is already emerging at UBS «Advisor Hub» wrote, as the dried up market for client advisors pushing UBS to lift its threshold for staff pay in order to win employees.
In reference to the bank's hiring, the outlet quotes a source as saying: «They’re back in pretty aggressively. (...) Under the right circumstances, they are as aggressive as anyone else these days.»
