UBS is transforming its US wealth management division to attract a broader clientele, challenging industry giants like Merrill Lynch and Morgan Stanley.
In a strategic maneuver aimed at enhancing its competitive stance against formidable adversaries such as Merrill Lynch and Morgan Stanley, the Swiss banking conglomerate UBS is embarking on a significant transformation of its US wealth management division. This initiative, as reported in an internal memorandum disseminated earlier this week, seeks to broaden the firm’s appeal beyond its historically narrow focus on ultra-high-net-worth (UHNW) clientele.
The Zurich-based institution, which recently finalized its acquisition of Credit Suisse—a venture that commenced last year—recognizes the imperative to bolster its market position amidst a landscape dominated by its rivals. According to a report by InvestmentNews, UBS’s US wealth unit has traditionally operated with profit margins hovering in the low double digits, a stark contrast to the mid-20 percent range enjoyed by its competitors. In response, UBS is optimistic that leveraging scale and enhancing interest income from banking services will catalyze a turnaround.
The restructuring plan entails the segmentation of the US wealth unit into six distinct divisions, coupled with an expansion of UBS’s banking services. Furthermore, UBS is amplifying its Global Family & Institutional Wealth (GFIW) Pod framework to incorporate specialized capabilities from the UHNW Solutions Group (USG) and its newly established Unified Global Alternatives (UGA). This integration will synergize with the Unified Global Banking (UGB) team and other GFIW functionalities within the overarching framework.
A noteworthy addition to this strategic revamp is the introduction of the “UHNW Plus” client segment, which effectively amalgamates the existing GFIW client segment. GFIW Americas will persist in its operations within the global GFIW framework, maintaining established reporting lines. This multifaceted approach not only reflects UBS’s commitment to innovation but also underscores its ambition to redefine the parameters of wealth management in an increasingly competitive arena.
