July 6 (Bloomberg) -- Bank of America Corp. ousted UBS AG as the world’s biggest wealth manager last year after buying Merrill Lynch & Co., according to Scorpio Partnership.

Bank of America managed $1.5 trillion at the end of 2008 compared with $1.39 trillion at UBS, Switzerland’s biggest bank by assets, London-based Scorpio said today in a new study of 248 institutions worldwide. Citigroup Inc. was third and Wells Fargo & Co. climbed to fourth after purchasing Wachovia Corp.

While wealth managers hired 6 percent more staff last year, taking advantage of upheavals in the banking industry, income fell 8 percent, Scorpio said. With the financial crisis slashing client assets in the wealth management industry by 16 percent to $14.5 trillion in 2008, that hiring opportunism may be misplaced, said Scorpio Managing Partner Cath Tillotson.

“Assets are going down and the number of millionaires isn’t increasing,” Tillotson said in an interview from London. “It’s worrying that we’ll potentially see a slash-and-burn reaction once banks realize that the net new money isn’t there for them to chase.”

The number of millionaires worldwide fell a record 15 percent to 8.6 million in 2008, a June 24 survey by Capgemini SA and Merrill Lynch showed. Declining property and equity markets last year helped cut the value of millionaires’ assets by 20 percent to $32.8 trillion, the survey said.

The Capgemini and Merrill Lynch report estimates total wealth while Scorpio measures banked or managed wealth.

The Standard & Poor’s 500 Index slid 39 percent last year and less than 1 percent in 2009.

Following is a table of the world’s biggest wealth managers, based on 2008 data from the Scorpio survey.

Rank      Firm                Assets under Management
                              ($ billions)

1         Bank of America Corp.    1,501
2         UBS AG                   1,393
3         Citigroup Inc.           1,320
4         Wells Fargo & Co.        1,000
5         Credit Suisse Group AG     612
6         JPMorgan Chase & Co.       552
7         Morgan Stanley             522
8         HSBC Holdings Plc          352
9         Deutsche Bank AG           231
10        Goldman Sachs Inc.         215

To contact the reporter on this story: Warren Giles in Geneva at wgiles@bloomberg.net

Last Updated: July 6, 2009 01:00 EDT