Zurich, Switzerland – UBS (UBSG.S), the world’s second-largest wealth manager following its takeover of Credit Suisse, is on a mission to expand its foothold in the lucrative U.S. market for catering to affluent Americans. Despite contemplating a 30% reduction in its combined global workforce in the wake of the Credit Suisse acquisition, UBS has successfully recruited 50 financial advisers in the first half of the year, signaling a strong commitment to bolstering its U.S. wealth management division.
Among the new recruits are seasoned professionals from esteemed institutions such as Bank of America’s Merrill Lynch unit, JPMorgan Chase’s recently acquired First Republic Bank, Citigroup, and Wells Fargo. Notably, 30 of these advisers joined UBS after the announcement of the Credit Suisse deal in March. The largest acquisition was BG Group, a formidable 13-person team that previously managed $2.5 billion at Merrill Lynch.
While UBS has a dominant presence in the wealth management sectors of Europe and Asia, it currently ranks fourth in the U.S., where American banks hold sway in managing the finances of ultra-rich clients. Recognizing the significance of the U.S. wealth market, Iqbal Khan, UBS’ president of global wealth management and executive board member, emphasized that investing in and expanding their U.S. business is a top priority for the bank.
Mr. Khan’s commitment was further demonstrated when he engaged with high-net-worth clients in southern California on the same day UBS finalized its historic merger with Credit Suisse. Additionally, he led an internal event honoring the bank’s best-performing financial advisers, underlining the strategic importance of the wealth management division.
Notably, the Credit Suisse acquisition did not impact UBS’ wealth business in the U.S. owing to the withdrawal of Credit Suisse from U.S. private banking in 2015, which involved the transferring of around 275 financial advisers to Wells Fargo. However, UBS has experienced a remarkable surge of over 25% in private wealth advisers catering to ultra-high-net-worth clients in the U.S. over the past three years. Although UBS’s Americas region boasted 6,147 advisers as of late March, the precise number based in the U.S. was not disclosed.
Global banks are increasingly investing in wealth management businesses, which provide a stable source of fees and serve as a counterweight to the volatility seen in investment banking and trading operations. Most of these institutions are targeting the fastest-growing group of ultra-high-net-worth clients with more than $30 million in investable assets.
John Mathews, UBS head of private wealth management in the Americas, emphasized their focus on attracting and retaining advisers skilled in serving this affluent population. He pointed out that the number of millionaires worldwide with net worths above $50 million had increased by over 50% between 2019 and 2021, with a significant portion residing in the U.S.
UBS acknowledges that wealth management plays a pivotal role in its overall profitability, with an estimated 63% of future profits projected to come from this sector within four years, according to Morningstar analyst Johann Scholtz. This focus on wealth management has positively impacted UBS’s stock, which has gained 6.5% this year and an impressive 17.5% over the past 12 months.
Looking ahead, UBS is positioning itself to capitalize on the wealth transfer from baby boomers to their heirs in the coming years. Diversifying its adviser workforce in terms of age and race, the bank aims to organize events targeting multiple generations of affluent families. UBS projects that approximately $18 trillion will be passed on to younger generations in the U.S.