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Industry Spotlight > Broker Dealers

UBS Q4 Results Miss Mark, Despite Boost in Wealth Unit

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UBS fourth-quarter results missed analysts’ estimates for earnings and revenue. Net income came in at about $696 million up from a loss of about $2.4 billion a year ago. Meanwhile, revenue weakened about 3% from last year to almost $7 billion.

The firm’s global wealth-management business had outflows of net new money of about $7.9 billion in Q4’18. Net new money outflows in the Americas were $3.6 billion, though money inflows to existing clients in the Americas were at “healthy” levels, according to UBS.

(Related:  12 Best & Worst Broker-Dealers: Q3 Earnings, 2018)

“In wealth management, particularly when I look at our overall results, of course they are not up to our ambitions and our expectations,” UBS Chairman Sergio Ermotti told Bloomberg Television early Tuesday, adding that he thinks investors are skittish due to trade issues.

In the latest quarter, wealth operations in the Americas had a pre-tax profit of $338 million, up about 16% from Q4’17; operating income (or revenues) rose 2% from a year ago to $2.3 billion, of which recurring fees were $1.5 billion.

Overall, the wealth unit has about 10,600 advisors worldwide; 6,850 are in the Americas. Recruiting loans to its global advisor force stand at $2.3 billion, down from $2.6 billion a year ago, while other advisor loans are $994 million as of Q4’18 vs. $580 million in Q4’17.

The advisors in the Americas have average yearly fees and commissions of roughly $1.35 million, up 8% from 2017. This tops the average production level of rivals at Merrill Lynch and Morgan Stanley when new registered reps are included; for veteran advisors, though, Merrill had average GDC of $1.36 million.

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