UBS is reviving an old idea as it targets a new client segment in the U.S. The move brings back memories of a robo advisor, which the bank ditched a few years ago.
UBS is targeting the U.S.’ mass affluent individuals with a digital product, which offers wealth management advice from humans remotely, according to a presentation by CEO Ralph Hamers during Tuesday’s third quarter results. The hybrid offering will be rolled out to clients with a range of $100,000 to $1 million in liquid financial assets.
Until now UBS was focused on capturing the U.S.'s super-rich. With its new push, the Swiss bank will be going after clients which are sought after by the likes of Goldman Sachs, J.P. Morgan and Bank of America.
Premature End?
These U.S. wire houses were quick to understand that retail banking and mass affluent business was the most vulnerable to the onset of financial start-ups and other digitized competitors. UBS made a foray into the affluent market with robo advisor Smartwealth, which it pulled the plug on three years ago, just 18 months after launching the pilot in the U.K.
Now the bank is reviving and elaborating the idea behind Smartwealth under its new CEO Hamers, who was hired by UBS with a digitization mandate. «We are a trusted brand in the U.S. (...) We see the opportunity to deliver our expertise and our content to a much broader set of clients,» Hamers said.
Two Million
UBS already counts two million U.S. clients in the affluent category from its employee stock and retirement plan platform. Since buying U.S. broker Paine Webber in 2000, it has continuously attempted to target higher segments of wealth than the traditional brokerage client. The U.S. unit now manages the wealth manager's biggest chunk of assets.
