Wealth Management US

The inflow of net new money in third quarter 2007 was CHF 5.1 billion, up from CHF 2.5 billion in second quarter 2007, when annual income tax payments are made. Inflows from newly recruited advisors rose. Including interest and dividends, net new money in third quarter 2007 was CHF 10.6 billion, up from CHF 8.9 billion in second quarter 2007.

Invested assets were CHF 870 billion on 30 September 2007, down 3% from CHF 898 billion on 30 June 2007. This is mainly a result of the depreciation of the US dollar against the Swiss franc. In US dollar terms, invested assets increased 2% from second quarter 2007.

The gross margin on invested assets was 76 basis points in third quarter 2007, down one basis point from second quarter 2007 as revenues in Swiss franc terms fell while average invested asset levels remained stable.

The cost / income ratio improved to 89.2% in third quarter 2007 from 90.4% in second quarter 2007 on lower general and administrative expenses.

Recurring income in third quarter 2007 reached a record CHF 1,092 million, up 5% from CHF 1,040 million in second quarter 2007. Excluding the effects of currency fluctuations, recurring income rose 7%, driven by increases in fees from managed accounts, investment advisory, and non-proprietary funds, as well as interest income from account deposits. Recurring income represented 65% of total operating income in third quarter 2007, up from 61% in second quarter 2007.

Revenue per advisor in third quarter 2007 totaled CHF 208,000, down from CHF 212,000 in second quarter 2007. This was because income fell on negative currency translation effects while the number of financial advisors increased. In US dollar terms, revenue per advisor was practically unchanged from second quarter.

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