UBS beat expectations with a second-quarter profit of about $1.06 billion (1.03 billion Swiss francs). Analysts had forecasted a second-quarter profit of $701 million (680 million Swiss francs).

The company’s adjusted pretax profits increased slightly from a year ago to $1.72 billion (1.67 billion Swiss francs) in the second quarter of 2016.

“In the second quarter, the slowdown in economic growth, the challenging interest rate environment and geopolitical turmoil – including Brexit – intensified the storm of uncertainty in the industry,” Sergio P. Ermotti, UBS Group’s CEO, said in his earnings call remarks. “On a global basis, this translated into increased cash holdings for our wealth management clients from already high levels and very low transaction volumes.”

Wealth management operations outside of the Americas experienced a drop in pretax profits from a year ago to $625 million (606 million Swiss francs) in the second quarter of 2016, down $168 million (163 million Swiss francs) from the second quarter of 2015. However, wealth management attracted $6.2 billion (6.0 billion Swiss francs) in net new money, driven by strong net inflows from Asia Pacific and Switzerland partly offset by cross-border outflows in emerging markets and Europe.

Americas Results

The Wealth Management Americas unit, which includes more than 7,000 advisors, reported that its operating earnings declined 1% year over year to $1.9 billion, mainly due to lower client activity and lower mutual fund fees. Adjusted pretax profits increased to $281 million – up 15% from the prior quarter and 22% from a year ago. According to the company, the increase in adjusted profits reflects record net interest income and lower operating expenses.

“Wealth Management Americas delivered a strong performance, with profit before tax up more than 20% year on year, and our financial advisors maintained their status as the most productive among peers,” Ermotti said in his earnings call remarks.

Net new money inflows for the period were $2.4 billion despite seasonal tax-related outflows, compared with $0.7 billion of net outflows in the same quarter last year.

Profits excluding special charges were $298 million, the company says.

Invested assets for the unit were $1.077 trillion, up 3% from the prior quarter and 3% from a year earlier. According to the company, this reflects positive market performance.

The level of invested assets per advisor stands at $151 million, up from 3% from $147 million in the prior quarter and up slightly from $150 million from the year-ago period.

Average fees and commissions per rep grew slightly from the first quarter to $1.08 million. This is a drop from $1.12 million a year ago.

The group includes 7,116 financial advisors, a loss of 29 advisors from the prior quarter but up 168 advisors from a year ago. The company says its headcount remains slightly above its target range.

The company recently announced operating model changes that focus on retaining its existing financial advisors and selectively recruiting financial advisors with top productivity.

“We also recently announced changes to our organizational model in WMA, including a new compensation model, with emphasis on retaining our best advisors,” Ermotti said. “This will allow us to de-emphasize the aggressive recruiting practices prevalent in the industry, which are not in the best interests of our clients, advisors and shareholders.”