UBS’ Americas wealth head says he thinks losing a ‘few hundred’ advisers would not be a bad thing, and is looking at what robos can do for some of the bank’s richest clients (UBS)

REUTERS/Arnd Wiegmann

UBS wealth management executive John Mathews is so encouraged by a collaboration with SigFig on a digital wealth tool for smaller accounts that he’s looking at what can be done for wealthier clients, particularly when it comes to the next generation.
Mathews, who leads UBS’ private wealth management and ultra-high-net-worth business for the Americas, spoke about digital capabilities and adviser headcount with Business Insider.
"We like the number we’re at now, and we actually think we’re probably even better with a few hundred less financial advisers," he said at the bank’s Manhattan offices.
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UBS rolled out a digital wealth platform in April 2018 by teaming up with fintech startup SigFig, and at the time promoted it largely as a nice-to-have enhancement for smaller US clients.

Now, John Mathews, the head of private-wealth management and ultra-high net worth at UBS Global Wealth Management for the Americas, told Business Insider he is looking at possible ways to put digital services to use with some of the bank’s richest customers.

And the next five years will be key in terms of selling high-end wealth management to a younger audience and what UBS, the world’s largest wealth manager, expects to be an increasingly diverse clientele, Mathews said in a recent interview. The bank meanwhile has "no interest" in expanding adviser headcount, he said.

"We’ve been so impressed with it, I actually am starting to look at it for things I can do with the ultra-high-net-worth clientele. Especially from the next generations," Mathews said about the SigFig collaboration.

UBS, which scaled its investment banking business back in the years following the financial crisis, has prioritized the US wealth market with the intent to add assets and revive wealth management margins there. Across the industry, profit margins have come under pressure as fees fall and fierce competition mounts for clients’ money.

But UBS is not looking to add adviser headcount, Mathews said, and could make do with several hundred fewer advisers. Instead, it has been focused on higher-end clients and making advisers more productive.

"We like the number we’re at now, and we actually think we’re probably even better with a few hundred less financial advisers," he said.

UBS

In its second-quarter earnings report, UBS said it had 6,689 US-based advisers, the most of its four regions. It reported 10,294 total across the US, the Asia Pacific, Europe, Middle East and Africa (EMEA), and Switzerland. That’s down from 6,790 and 10,463 in the first quarter.

Amid fierce competition for adviser talent, UBS followed competitor Morgan Stanley two years ago in exiting the so-called broker protocol, in essence an agreement among industry players to not sue brokers who quit for jobs at competitors. At the time, outlets including Reuters and Bloomberg reported that UBS wealth executive Tom Naratil said in an internal email his priority was boosting productivity.

UBS, along with wirehouse rival Morgan Stanley, has been emphasizing the importance of adviser-based revenues to balance out more volatile and capital-intensive businesses. And like many firms playing in the high-end space, UBS views the personal touch as key.

"It’s a business that you can’t Uber-ize, you can’t Airbnb it — it’s not a digital business, even though you have to have digital capabilities," Mathews said.

Still, digital advice may have a place when human advisers are helping families with generational wealth, he said, and is a potential stepping stone between lower-end offerings and higher-touch services.

The SigFig-powered platform, which UBS calls its first digital advice tool for US clients and allows users to track financial goals and access digital portfolio guidance, has been aimed at smaller wealth clients that use salary-based UBS employees for financial advice. Mathews said the results of those pairings have him thinking about what he can do for richer customers.

"I think we’re ahead of schedule with our product and the feedback from clients has been great, so we’ve been really excited about it," he said. He said that digital platforms can give younger people "hands-on experience" managing their own money that can be tied in to a financial adviser relationship.

Mathews said that a big wealth transfer between generations is expected in the coming years, and digital is part of appealing to a broader client base and capturing those assets.

"We have five years to get that right, or we won’t have clients. That’s my stake in the ground," he said.

The massive wealth transfer expected in the coming decade is shaping many wealth managers’ thinking about working with younger clients. Individuals with a net worth of $5 million or more — some 550,000 people — will transfer $15.4 trillion of wealth by 2030, estimates Wealth-X, a wealth and financial research firm. More than half of that wealth transferred will be in North America, according to the firm.

"Our digital experience is all part of that, so we have to be able to offer that as a tool for whatever generation the family needs help with," Mathews said.

SigFig has worked with other bulge-bracket and regional players in the space. The fintech has partnered with Wells Fargo Advisors and Citizens Bank Wealth Management to build out digital wealth advisory offerings. The 12-year-old San Francisco-based company is backed by the likes of Bain Capital Ventures and Union Square Ventures.

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