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UBS Expands Family Offices Arm, Flags Other Changes

Tom Burroughes

7 January 2020

, the world’s largest wealth manager, which is building out its family offices business, has reiterated confidence in its global model, having folded its old Americas unit into the rest of the organization just under a year ago. 

A Bloomberg report today claimed that the Zurich-listed bank planned to shed 500 jobs. The bank declined to comment on a specific figure when contacted by Family Wealth Report, and none was cited in a memo from wealth management co-heads Iqbal Khan and Tom Naratil, which had been seen by this news service. This publication understands that the 500 figure is incorrect.

Referring to the Global Family Office development, the memo said: “We will now open up access to our unique GFO capabilities to 1,500 clients (more than double today's number). Our aim is to become the 'House Bank' for all these clients with the greatest share of wallet by providing them with coverage, opportunities and execution they cannot get anywhere else.”

Joe Stadler will lead the GFO unit’s growth, reporting directly to Iqbal Khan and Tom Naratil, wealth management co-heads, the memo said. Global family office market heads will report to Stadler and their respective regional business unit head. (Khan's move to UBS from Credit Suisse late last year has been fraught with controversy; his erstwhile employer spied on him after he handed in his notice, leading to the resignation of its chief operating officer.)

The expansion of GFO follows recent steps taken in the US to strengthen the ability of UBS’s family office consultants to meet the complex and often institutional needs of clients there, it continued. 

On other changes, UBS said: “We are therefore expanding our existing strategic partnerships with the Investment Bank (IB) and Asset Management (AM). Going forward, all GWM clients globally will be able to benefit from improved access to financing, global capital markets, and portfolio solutions.” 

Changes will enable UBS to “meet our 2018 Investor Update ambition of $20-30 billion in net new loans per year”.

UBS has in recent years intensified its focus on ultra-high net worth clients, and the memo said that the segment will grow the fastest over the coming decade. The bank has made a point about serving such clients, stressing how its full range of service gives it an edge, particularly as UHNW clients typically have complex business as well as private wealth needs. UBS and its peers are under pressure to raise performance. In its home Swiss market, UBS and rivals contend with negative official interest rates, while globally new wealth business models constantly challenge big banks’ status. Separately, the family offices market continues to be a battle ground for business. Deutsche Bank - as exclusively reported by sister news service WealthBriefing today - is building out its family offices arm in Europe.

“Feedback from advisors and market heads has told us that we can better serve UHNW clients who do not require daily institutional coverage from the investment bank, by increasing internal alignment and collaboration within regions. UHNW advisors and their client relationships will therefore be integrated into regional business units to increase speed and proximity to clients,” it said. 

The memo, which noted that UBS has $2.5 trillion of invested assets, looks ahead to a decade that it said will be “one of transformation”. 

“Secular trends such as the search for yield, sustainable investing, demographics, succession, retirement planning and technology will continue to drive the behavior of our clients and provide new opportunities, particularly for wealth managers. Trusted advice will become more sought after than ever and our strengths position us for even greater success in the years ahead – for our clients, for each other, and for our shareholders,” the memo said.

The memo also talked about “streamlining” some of its processes and speeding up decision-making and time to market by “delayering, reducing organizational duplication, and increasing business unit (BU) autonomy, which comes with more accountability”. The memo did not elaborate on details, such as whether this might involve shedding or moving job roles.

“To realize our ambition of increasing time spent with clients, we will roll out new technology and strengthen incentives and accountability to improve efficiency across GWM. In EMEA we will create three distinct business units to recognize the opportunity of the region and to fully realize its potential,” the memo continued. 

The memo added: “We are therefore expanding our existing strategic partnerships with the Investment Bank (IB) and Asset Management (AM). Going forward, all GWM clients globally will be able to benefit from improved access to financing, global capital markets, and portfolio solutions.”

Among other developments, UBS said it will build a “Unified Global Markets” team by combining IPS Global Capital Markets and IB Global Markets sales, structuring and product management teams. 

“To further align client portfolios with the UBS House View and drive improved investment performance and advice, we will merge CIO, mandates and wealth planning and further strengthen our successful collaboration with AM , particularly in the US,” it said.

The bank said it was hosting a “townhall” briefing on the changes and will elaborate more on its plans in coming days.