* Nearly 200 financial advisers left UBS, sources say

* UBS targets 15% pre-tax margin in US wealth division,

up from 13% last year

* RBC and Wells Fargo ( WFC ) hire top UBS financial adviser

teams

By Tatiana Bautzer and Nivedita Balu

NEW YORK/ TORONTO, March 20 (Reuters) - Swiss bank UBS

Group is facing obstacles in revamping its U.S. wealth

management business after losing billions of dollars in client

assets and nearly 200 financial advisers, according to analysts

and three industry sources with knowledge of the matter.

UBS had an outflow of $14.1 billion in net new assets in the

Americas in the fourth quarter, according to its financial

statements, reflecting a net outflow for the year of $6 billion

in the Americas.

The bank has sought to expand in the key U.S. market while

fending off Swiss regulators' moves to raise its capital

requirements after UBS rescued Credit Suisse in 2023. Those

guidelines are expected to be clarified this spring.

The recent asset outflows from the U.S. wealth management

business will make it more difficult for UBS to boost profits

and grow in the world's largest economy, according to Morgan

Stanley ( MS ) analyst Giulia Miotto.

"We think the market will want to see a change in trend in U.S.

flows to gain confidence in the turnaround in this division,"

she wrote in a note, adding that was unlikely before the third

quarter.

UBS did not specifically address a Reuters request for

comment on the asset outflows and how it affects the business,

but pointed to recent comments from CEO Sergio Ermotti in which

he said the planned turnaround of the U.S. wealth management

business was working.

Almost 200 U.S. advisers left UBS over the last year, taking

client assets to rivals such as Morgan Stanley ( MS ), Wells

Fargo ( WFC ), Bank of America ( BAC ), Charles Schwab ( SCHW )

and RBC, said the three industry sources, who declined

to be identified while discussing personnel moves. A fourth

source also reported the moves.

UBS had 5,772 financial advisers at the end of 2025, 196

fewer than a year earlier, according to its financial

statements.

Three of the sources said advisers were leaving UBS for

several reasons, including higher compensation, access to more

resources and growth opportunities. The bank had announced

changes to adviser compensation in September.

UBS promoted former wealth chief operating officer Lisa Golia in

February to head hiring, retention and compensation of financial

advisers.

TARGETING HIGHER U.S. MARGINS

The Swiss bank set a target of 15% pre-tax margin on the

wealth division in the U.S. this year. It rose last year from

9.3% to 13%, but is still significantly lower than rivals. It is

also less than half of the 30% margin UBS obtains with wealth

management in Europe and the Middle East and 35% in Asia.

The recent improvement in U.S. pre-tax margins shows the

planned turnaround of the U.S. wealth management business is

working, Ermotti told analysts in February on the bank's

earnings conference call.

Ermotti told a conference in Miami last month that he

thought some advisers were not bringing profits to UBS, and

changes were needed to increase profitability.

"We can't fix that issue of restoring pre-tax profit margins

by being overly popular with people that are not growing their

businesses," he said.

The bank had to let go of some good client relationships

whose business did not justify the capital that was allocated to

them, he added.

One part of UBS' strategy to turn around U.S. wealth is to

use its national banking charter, approved in January, to offer

more banking services. Ermotti cited growing loans and offering

new products as a way to catch up with rivals.

RIVALS HIRING UBS TEAMS

Canadian bank RBC attracted 90 experienced financial advisers to

its U.S. wealth management division in 2025 and approximately

80% of the hires generated more than $2 million of revenue. Some

of the largest and most sophisticated teams came from UBS, said

Amanda Dolan, RBC's head of advisor recruiting.

Wells Fargo's ( WFC ) largest addition to wealth management advisers

last year was Hingham Street Partners, a large Boston-based team

recruited from UBS in December, that managed $6.3 billion at the

time. Wells Fargo ( WFC ) confirmed the hiring but declined to comment

further. Hingham Street founders Peter Landry, Lawrence DePaulis

and Timothy Fortune did not comment.

Bank of America ( BAC ) hired a UBS team in Providence, Rhode

Island, that managed around $800 million, led by Robert

Procaccianti, Jared Tack and Douglas Bennet in January, after

recruiting former UBS teams in Texas and California late last

year. Bank of America ( BAC ) and the executives declined to comment.

Charles Schwab ( SCHW ) and Morgan Stanley ( MS ) declined to comment on hiring

advisers from UBS.

One former UBS financial adviser, who declined to be named,

said he left to open his own independent advisory after more

than 10 years at the Swiss bank because years of cost cuts had

eroded his pay. Going independent raised the adviser's share of

the revenue earned from fees to 70 cents of each dollar, before

taxes, from 50 cents previously, he said.

Another adviser, who also asked not to be named, cited lack

of support and resources as reasons they left to join a rival

after two decades at UBS.

UBS shares have fallen nearly 21% this year as the bank

awaits clarity on capital requirements from Swiss authorities.

Its U.S. wealth performance "remains a key concern to

investors," said KBW analyst Thomas Hallett, adding the global

target of $125 billion inflows this year represented a modest

increase from $101 billion last year.

"There is no quick fix for the ongoing issues in the U.S.

wealth management business," he said.