UBS reset its compensation model for large advisory teams in its U.S. wealth management business to rebalance payouts between shareholders and financial advisors, according to comments by Group Chief Executive Officer Sergio Ermotti at the UBS Financial Services Conference in Key Biscayne, Florida, as reported by AdvisorHub.
Ermotti said the firm reduced grid-based take-home pay for large teams that failed to grow their business, with the 2025 compensation plan changes falling most heavily on teams and producers generating under $1 million, according to AdvisorHub. He explained that UBS could not restore profit-before-tax margins while maintaining compensation structures for advisors who did not expand their practices.
The CEO acknowledged that UBS accepted lower net new money in exchange for what he described as higher-quality growth, according to AdvisorHub. The compensation changes came amid heightened advisor departures and a fourth-quarter 2025 report showing net client outflows of $14.1 billion, up from $8.6 billion in the prior quarter, resulting in negative net new assets for the full year.
Despite those outflows, UBS's Americas wealth management profit margin rose to 13 percent in 2025, nearly 2 percentage points higher year over year, though still below the firm's stated goal of reaching an 18 percent margin by 2028, according to AdvisorHub.
Ermotti also pointed to structural differences between U.S. and European advisor compensation models, noting that U.S. advisors typically retain a larger share of the fees and commissions they generate than their salaried European counterparts, according to AdvisorHub. He said the Americas remains UBS's least profitable region and continues to trail major competitors, including Morgan Stanley and Merrill Lynch, which each approached 30 percent margins in 2025.
Looking ahead, Ermotti said UBS does not expect its U.S. wealth unit, which also includes advisors in Canada and Latin America, to match the profitability of its U.S. peers. While he did not name competitors, he emphasized that UBS's global wealth management footprint differentiates the firm, AdvisorHub reported.
Ermotti said UBS may achieve incremental improvements but described it as unrealistic to expect U.S. profit margins to reach peer levels, stressing the need to maintain balance consistent with UBS's global identity, according to AdvisorHub. Although UBS leadership has expressed a willingness to absorb advisor attrition, the firm has taken steps to ease pressure on advisors. In September, UBS introduced a new compensation plan for 2026 that softened, but did not reverse, elements of the 2025 changes.
Echoing recent remarks from Chief Financial Officer Todd Tuckner, Ermotti said he expects positive momentum in net new asset growth in the U.S. wealth unit during the second half of 2026, according to AdvisorHub.
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