This publication talks to the people driving UBS's foray into the world of digital wealth management.

It is the world’s largest wealth management house and at first blush it might appear the kind of entity far beyond the reach of aspiring professionals wondering when they will have wallet sizes to match their ambitions. But as UBS has recently shown, its foray into the digital world potentially could lead to a revolution in how this Swiss house is perceived.

Shane Williams, who is co-head of UBS SmartWealth, an online wealth management venture of the Zurich-listed bank, thinks it is possible to “democratise” UBS’s offerings and help plug the kind of advice gaps frequently blamed on rising regulatory burdens in Europe, the US and beyond. 

UBS announced in October this year it was rolling out the UBS SmartWealth service in the UK, just over a year after executives at the bank gave Williams and his team blessing – and funding - to build the platform. And the ambition has been to build something that is far more than just a digital version of existing UBS offerings, but to start by asking what clients want and proceed from there, Williams told this news service recently.

“We want to leverage what UBS has for an under-served market,” Williams said. One area that is particularly under-served, he and his colleagues say, is the market for advice.

(There are, meanwhile, digital models of wealth management firms that provide discretionary investment services in response to a users’ stated preference, such as Nutmeg, to take a prominent case. In the US, an example of a digital advice firm might be FutureAdvisor, the business bought by US asset management giant BlackRock in 2015.)

Williams, who has worked in the technology field for about 25 years, works alongside Nick Middleton, who has a background in the financial services and investment management fields; he joined UBS in 2009 and after holding a number of roles, moved full-time into the UBS SmartWealth team in April this year. At present, some 80 people work on UBS SmartWealth. This operation sits inside UBS Wealth Management and is located in the chief operating office, headed by Dirk Klee.

Williams points out that UBS SmartWealth is not the product of some sort of standalone UBS “incubator” or laboratory - the pattern of firms forming “innovation labs" is all the rage at the moment - but very much part of the bank, even if the development teams have a level of autonomy. For example, the intellectual firepower of UBS’s chief investment office feeds into SmartWealth, Williams said. The bank did not disclose how much it has spent on developing UBS SmartWealth when asked by this publication.

What is UBS SmartWealth? For a start, based on the expressed personal goals of a client, the platform will give personalised advice. As far as the UK is concerned, a wannabe client must have a nominated UK bank account held in their sole name, a UK home address and tax resident status; the initial minimum payment is £15,000 and there are minimum top-ups thereafter of £1,000. This is, in other words, very much a mass affluent offering. Clients are offered active and passive investments to suit preferences, and interestingly, it is also open to existing UBS clients.

The bank intends to roll out the UBS SmartWealth service internationally in the coming years (excluding the US). 

Collaboration
Middleton was asked how other members of the UBS wealth business felt about UBS SmartWealth. Was there any concern that the new platform might simply draw business away from existing UBS channels? In response, he said that UBS wealth managers have been “very interested” in the offering and have bought into the idea. “They can really see the benefits of what we have done and it all feels very collaborative,” he said. “This can actually allow them to increase the depth of the relationships they have with existing clients,” he said.

Such an offering, in fact, is a great way for UBS to ensure that the next generation thinks of UBS when deciding how and with whom to manage their money and seek advice. And that, ultimately, is the key in ensuring that the world’s largest wealth manager keeps its edge in the face of fintech competitive assault.