(July 13 – 12:30 ET) – An article in today’s New York Times argues that UBS AG’s deal for PaineWebber vindicates the traditional brokerage model in the face of the burgeoning online business.

UBS’ decision to buy old school PaineWebber suggests that UBS at least still believes in the business of getting rich investors to pay for financial advice. Reports of the traditional brokers’ demise was greatly exaggerated it appears, despite the emergence of $5 online trades and the apparent capitulation of old giants such as Merrill Lynch, which launched large online offerings after resisting for some time.

“Although some analysts said they thought UBS was paying too much, most agreed that PaineWebber’s network of brokers who cater to investors with at least $500,000 in assets is a franchise that has proved far more valuable than its critics ever acknowledged through most of the last decade,” the story says.

The fact that the firm earned more than US$1 billion before taxes last year, makes it easy to see why UBS fell for PaineWebber.

All of the major U.S.-based brokerage firms say they will continue to expand their ranks of brokers, the Times reports, noting that some analysts expect PaineWebber’s competitors to use the takeover as a reason to step up efforts to attract brokers from other firms.