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UBS Americas Sees Tax-Related Outflows but Invested Assets Rise 5% in 3Q

By Alex Padalka October 20, 2020

UBS’s wealth management business in the Americas shed advisors and saw money leave in the third quarter, but its invested assets inched up nonetheless.

The Americas unit saw $9.2 billion in outflows of net new money during the third quarter, which included tax-related outflows of $5.5 billion due to the Covid-19-related tax deadline extension to July, according to the company’s third-quarter earnings report. The unit ended the third quarter with $1.44 trillion in invested assets, up around 5% from the $1.37 trillion it had at the end of the prior quarter and $1.33 trillion the firm had at the end of the third quarter of 2019, UBS says.

Net new money for global wealth management, meanwhile, was $1.4 billion in the third quarter, and invested assets reached $3.80 trillion, up from $3.59 trillion in the prior quarter and $3.42 trillion at the end of the third quarter of 2019, according to the report. 

The Americas unit ended the third quarter with 6,353 advisors, UBS says, down from 6,410 it had at the end of the second quarter and 6,627 it had a year ago. 

Globally, UBS had 9,688 financial advisors at the end of September, a 1% drop from the prior quarter and a 5% drop year-over-year, according to the report.

The Americas unit’s operating income dropped $86 million year-over-year, to $2.24 billion in the third quarter, which UBS attributes primarily to “lower recurring net fee income as higher invested assets were offset by lower margins, reflecting shifts toward lower-margin funds and advisory mandates, and lower net interest income, mainly due to U.S. dollar rate headwinds.”

Nonetheless, profit before tax in the unit rose by $39 million year-over-year, to $371 million, according to the report.

Globally, profit before tax in wealth management was $1.06 billion, up 18% year-over-year, on $4.28 billion in total operating income, up from $3.94 billion in the second quarter of 2020, UBS says. 

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