Company Profiles

UK Regional Strategy Is Long-Term Commitment, Big Deal For UBS

Tom Burroughes Group Editor London 13 July 2021

UK Regional Strategy Is Long-Term Commitment, Big Deal For UBS

We are looking at a number of international banks' and local UK firms' approaches to the UK regions, where there is a good deal of wealth and entrepreneurial vigour. Government policy, Brexit, and other shifts underscore changes afoot.

For UBS, having a broad footprint in the UK regions is a long-haul strategy that resonates with clients and has delivered results over the past two decades, senior figures have said.

This news service has decided to delve into the thinking behind why wealth managers large and small handle the UK regions, tapping into how the world beyond the traditional hunting grounds of London/Southeast holds plenty of promise. A fact that is sometimes drowned out with inevitable media and related focus on the capital. 

Having a regional strategy is important and not just a nice-to-have. “It’s critical and we have had a presence in the regions since 2002, first opening the Edinburgh office. It is important to be close to our clients, potential clients and intermediaries, and to be active in the local community,” Jonathan Brown, head of regions, told this publication in a call. UBS, the world’s largest wealth manager, has offices in Birmingham, Manchester, Leeds, Newcastle and Edinburgh.

The UK regional business of UBS accounts for about a third of the firm’s HNW business in the UK. UBS doesn’t provide exact figures, but it is thought to be around £5 billion, which is approximately double the size it was when the current structure was established six years ago, he said. To put those results into some sort of context, first-quarter 2021 financial results showed that the global wealth management arm of UBS chalked up a pre-tax profit of $1.409 billion, up from $1.218 billion a year ago. GWM operating income stood at $4.848 billion, against $4.547 billion a year earlier. Total invested assets were $3.1 trillion in global wealth management at the end of March. There were net new assets of $36.2 billion, with inflows coming from all regions. (In recent years the Zurich-listed bank has booked results in dollars, because most of its revenues are from outside Switzerland.)

As recounted earlier in this article, some industry figures who have spoken to this publication are sceptical about how important regional offices are, particularly in a world upended by remote working and digital tech amidst the COVID-19 crisis. But Brown is unimpressed by such arguments. 

That some commentators have been sceptical about the value of being in the regions is a bit of a “blind spot,” he said. Some 85 per cent of the UK population lives outside the greater London area and 65 per cent of the wealth in the country is outside that area.

His colleague, Martyn Begbour, regional head for the North West, Midlands, South West, and Wales, told this news service that there are so many opportunities outside London that a regional focus makes sense. 

“I think wealth management generally has been London-centric and does not realise how entrepreneurial the regions are. People are looking for a class-leading wealth management service but from someone who really knows the area and the local service providers. There is an emotional connection,” Begbour said. 

International, local
The UK is home to tens of thousands of residential non-doms (78,300 in the 2017-18 financial year), and not all of them live in London, but across the rest of the UK. A bank such as UBS with its international reach and resources has an advantage, UBS said. 

“For resident non-domiciled investors who reside in the regions, and although we don’t give tax or legal advice, UBS’s global reach and expertise is a big plus and we have the  ability to book clients in London, Jersey, Singapore, Zurich, among others,” Debjani Raffan, regional head for Scotland, Northern Ireland, North East and Yorkshire, said in the same interview. 

Brand awareness
UBS, unlike some banks such as Lloyds, HSBC and Barclays, doesn’t have a high street retail presence, but for the HNW and UHNW audience it caters for – particularly higher up the wealth scale – its brand powers it along. UBS believes that having bankers on the ground who are plugged into a community is worth investing in. “A number of other firms are starting to see what we identified years ago,” Brown said.

Asked about the government’s “levelling up” agenda, Brown said the impact on wealth will come from the companies and entrepreneurs who move into the regions and take flight there. “London and the Southeast must not be the default option for where people set up.”

His colleague Begbour said UBS’s presence in the UK for almost 20 years was important for clients as it proved that the regional strategy is not a fad.

”One reason clients like UBS is that we have been in the regions for a long time while some firms expand for a couple of years or so and then depart. We are clearly committed,” he said. 

Show me the receipts
Wealth management may be a long-term, patient business, but it has to be about results in the end. So how does the firm know that ploughing money into local offices is worth the effort?

The bank uses internal surveys of client satisfaction – carried out by external third parties – and net promotor scores, among other metrics, to test how big a dent UBS is making in the regions. “The indicators are very positive on an absolute and relative basis in the business,” Brown said. 

“When UBS came to the UK in 1999 it was very much known as an investment bank. I spent much of my career at UBS [since 2005] and we have been building that awareness,” Raffan added. 

“Our market is entrepreneurs, both newly-made and multi-generational, so having the right advisors who can engage with clients is important. We also want to be the springboard for our investment banking and asset management divisions into the regional market place,” Brown said. 

Inevitably, the question of how regional offices coped with COVID-19 came up. 

“For some time now we have (always) been digitally enabled and clients have become more comfortable with meetings on Zoom, Skype and other platforms. But the ability to interact locally with us will remain central,” Brown said. “Going forward it will be a mix in which there will be annual get-togethers with families and also meetings via Zoom, where we can easily include a product specialist on private equity or sustainable investing or a wealth planner etc,” he said. “Our clients have adopted new habits and demands, and we’re well positioned for further growth.”

Raffan said that she and her clients have seized the chance to have open-air conversations when circumstances allowed. 

“I have had a few `walking relationships’ with clients,” talking about meeting clients outdoors for a socially-distanced walk as a contrast to sitting over a desk or going on a video. Clients like it she said, quipping that she keeps a pair of Wellington boots in her car for meeting people out in the countryside.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes