UBS Group AG's Americas wealth division reported $3.5 billion in net outflows during the second quarter, marking a sharp reversal from the $6.2 billion in gains recorded during the same period last year and the $20.2 billion posted in the first quarter of this year, as reported by AdvisorHub.

The unit, which includes a limited number of advisors in Canada and Latin America, saw its headcount drop by 229 advisors year-over-year, a nearly 4 percent decrease to 5,773 advisors. The attrition rate also accelerated compared to the first quarter, when the drop stood at 3 percent year-over-year.

Chief Financial Officer Todd Tuckner acknowledged that seasonal factors contributed to the departures but also conceded that attrition is expected to continue. He attributed some of the turnover to recent changes in advisor compensation aimed at boosting U.S. profitability.

The decline in net new assets is particularly notable as UBS's larger U.S. wealth rivals posted gains. Morgan Stanley, with nearly 15,000 advisors, reported $59 billion in net new assets, a 63 percent increase year-over-year. Bank of America's wealth unit, which includes Merrill Lynch's 11,000 advisors, reported approximately $14 billion in net client flows.

According to AdvisorHub, UBS has faced a wave of advisor defections in recent months. In July, two teams managing $1.2 billion in combined assets left for Merrill Lynch and Ameriprise Financial's independent platform. Three teams with $1.4 billion combined exited in May for Wells Fargo Advisors, Stifel Financial, and Morgan Stanley.

Despite the challenges, UBS executives remain focused on improving profit margins through cost reductions, enhanced banking products, and additional client self-service options.

Tuckner emphasized that the advisors who remain at UBS are becoming more productive, noting that 90 percent have increased their annual production. He added that the firm is actively recruiting and has seen a record number of advisors commit to UBS's succession programs. Profits before taxes in the Americas wealth division rose 48 percent to $364 million on revenues of $2.9 billion, a 6 percent increase from the prior year. Tuckner said that, excluding recruiting and departures, net new money from existing advisors remains "substantially above levels in each of the last three years."

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