UBS Wealth Management Americas Profits Drop 94%

On Tuesday, UBS Wealth Management Americas reported that their pretax profits plummeted 94% year-over-year as the firm racked up millions in litigation and recruiting expenses. UBS stated that its wealth management unit brought in $300 million in pretax profits. The bank’s sale of Puerto Rico bonds and closed-end funds cost the firm approximately $284 million in the form of settlements or arbitration awards. UBS said its aggregate client complaints add up to $1.5 billion. The Department of Justice is also allegedly conducting a criminal inquiry into the impermissible reinvestment of non-purpose loan proceeds. UBS also expanded its advisor ranks by 151 Fas during the fourth quarter, raising its total advisor force to 7,140. Many of the new recruits joined from Credit Suisse, and because of this aggressive recruiting, the bank’s expenses were raised and recruitment loans to financial advisors increased 9% to $3.179 billion. UBS also stated that the recruiting and strong growth from existing advisors helped boost net new money for the quarter, which rose to $16.8 billion from $5.5 billion from the year-ago period.

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