ZURICH (Reuters) – UBS Group (UBSG.S) might double the revenue it makes from its American wealth administration arm inside a decade even because it cuts workers numbers by focusing on the super-rich, the co-head of the enterprise informed Reuters.
FILE PHOTO: The brand of Swiss financial institution UBS is seen at an workplace constructing in Zurich, Switzerland January 27, 2017. REUTERS/Arnd Wiegmann
By encouraging prospects to make use of extra profitable providers, similar to loans and mandates, the place the wealth supervisor takes extra management of a consumer’s investments, UBS might make do with considerably fewer U.S. buyer advisers than the 6,600 it now employs, its co-head of wealth administration, Tom Naratil, mentioned in an interview.
“Even when our whole adviser rely within the U.S. drops under 6,000, it will be a bunch of advisers who’re twice as productive as they’re as we speak, measured in income per adviser,” he mentioned.
“If we get that form of profile, then in 5 to 10 years from now we’ll have a enterprise that might most likely makes twice as a lot as we do as we speak.”
Naratil heads the enterprise alongside former Credit score Suisse (CSGN.S) star supervisor Iqbal Khan, who joined UBS final month. Whereas at Credit score Suisse, Khan managed to double his division’s pre-tax earnings in simply three years.
Each are thought-about candidates to succeed Chief Govt Sergio Ermotti within the years forward.
Within the U.S. market, UBS defines the excessive web price section as beginning at roughly $1 million in investable belongings. Over time, that threshold might rise to $5 million, so purchasers with $5-100 million could be served by its core adviser group.
It’s shifting to a mannequin during which these with greater than $100 million to take a position could be served primarily in partnership with UBS’s household workplace consultants.
Final 12 months UBS made a pretax revenue of simply over $1.5 billion in wealth administration in North and South America, considerably greater than in every other area. It was $6.four billion throughout the group. The financial institution introduced its concentrate on the American market at an investor convention a 12 months in the past. Outdoors america, UBS is already closely concerned within the super-rich enterprise.
Within the extremely aggressive U.S. market, the main target has been on rich people with belongings of as much as $100 million. Now UBS explicitly desires to handle super-rich individuals with much more cash. New advisers which UBS is wooing from rivals similar to JP Morgan (JPM.N) or Goldman Sachs (GS.N) also needs to assist with this development.
However UBS is being selective, Naratil mentioned. The variety of U.S. advisers has shrunk in recent times.
Within the first three quarters of 2019 UBS recorded outflows of $eight billion within the Americas area, however a lot of that is linked to less-wealthy prospects with whom UBS additionally earns much less, based on individuals near the matter.
Writing by Michael Shields, enhancing by Louise Heavens