UBS Group is starting a digital wealth manager in the U.S. to grab a bigger share of the country’s market for retirement savings and stock options, in a move that will pit it against the top Wall Street banks on their home turf.
The new digital bank will service affluent customers with between $250,000 and $2 million in assets, a group that UBS hasn’t previously targeted in a meaningful way, chief financial officer Kirt Gardner said Tuesday. While the bank plans to build the business organically, it’s open to acquisitions to accelerate the strategy, according to Chief Executive Ralph Hamers.
“Organic growth is basically the default,” Hamers said in an interview. But “if there is an inorganic option that could accelerate us into that direction, we would certainly consider it.”
The new business, scheduled to start some time next year, would be almost entirely digital but customers would still have the option to call on a human adviser, Gardner said.
UBS currently has about 2 million customers in the U.S. that it calls workplace wealth clients -- people with large pension funds and stock options -- and plans to use the new digital wealth manager to do more business with those clients as well as capture new clients.
The move will put UBS into more direct competition with firms such as Morgan Stanley, which last year doubled down on the business with the mass affluent through the purchase of Eaton Vance Corp. and ETrade Financial Corp. UBS’s wealth operations in the U.S. currently consist primarily of a network of advisers selling its products through a brokerage model to high-net-worth and ultra-high-net worth customers. The new digital bank will target a level of wealth below that.
Hamers, who took over a year ago, wants to use artificial intelligence to better pitch services to the world’s wealthy. He plans to update investors on the bank’s strategic direction and set new financial targets on Feb. 1.
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