M and A
UBS To Sell Online Wealth Management Operation
The operation was launched in 2016 but it has not reached the heights it had expected.
UBS is to shut the UK
robo-advisory service, UBS SmartWealth, which was launched in
2016, and sell the technology to US digital wealth manager
SigFig. The sale comes after a review by the firm found that its
commercial potential was “limited”.
The Swiss giant launched SmartWealth in an attempt to broaden its
appeal among retail consumers. Its minimum investment limit of
£15,000 ($19,300) was low compared with UBS’s core wealth
management business of high and ultra-high net worth
individuals.
UBS said in a statement:“We are proud of the award-winning
technology we have developed and were satisfied with the initial
commercial progress of UBS SmartWealth. Having conducted a
thorough assessment, however, at this time we believe the
near-term potential is limited and have therefore decided to
close our digital-only offering in the UK. We are pleased,
however, to have entered into an agreement to sell the
intellectual property relating to UBS SmartWealth to SigFig – a
financial technology firm that we have an equity stake in and
with whom we've been working for two years in the US. We are
confident that SigFig is best placed to accelerate and broaden
the commercial prospects of the IP behind UBS SmartWealth. We
believe the decision serves the best interests of the business
and will allow us to invest further in other client-facing
improvements, whilst sharing in the future success of the IP we
have created via our equity holding and ongoing partnership with
SigFig.”
It has been working with SigFig for two years on similar
offerings in the US. UBS acquired an equity stake in SigFig in
2016.
Recently, the former co-head of SmartWealth, Shane
Williams, left UBS to join AQR Capital Management. A UBS
spokesman said the sale was not due to Williams’ exit.
Large wealth management firms have been trying to broaden their
operations with digital wealth managers that build portfolios of
low-cost funds for retail investors. But they face an uphill
struggle against established fund managers. Nutmeg, a
robo-advisor founded in 2006, surpassed £1 billion in funds under
management for the first time in November — but the two largest
fund managers, Cofunds and Hargreaves Lansdown, manage £96
billion and £86 bilion, respectively.