At the end of the first quarter of 2021, UBS’s Americas wealth management unit had more than $1.6 trillion in invested assets, up 34% on the previous year, a record for the firm. In a client satisfaction survey over the 12-month period of these awards, the bank scored 9.6 out of 10, based on 35,000 responses. And the division made a profit of $1.45 billion, another record.
During a turbulent year, the leading wealth management firm did not rest on its laurels, with a flurry of initiatives underlying its financial success. UBS is again North America’s best bank for wealth management.
In April 2020 the bank set up a team in the US wealth management business to focus on the pandemic, helping to guide clients through everything from the Paycheck Protection Program (PPP), holding virtual events where business owners could help others, to creating a Business Owner Resilience Centre, a hub that gathered the regulatory information that clients needed.
“We saw a very troubling environment for people, with concerns first for their health and then for their wealth,” says Tom Naratil, UBS’s co-president of global wealth management and president, Americas. “The human interaction was something that people craved and really needed – some of our most popular client events were where scientists and medical experts were delivering information.
“But it also showed us that the way to get to our clients with great information in scale was by leveraging our digital platforms more than ever before.”
Sure enough, the bank’s wealth management business went through what Naratil estimates was about three to five years of upgrades in just 12 months. But he thinks the year also showed that those who thought wealth management would gradually move towards being entirely digital and those that felt digital wasn’t needed in the business were both proved wrong.
“Ultimately it’s about what is convenient for our clients right now,” says Naratil.
Brian Hull, executive vice chairman for UBS Americas, has been with UBS since 2009 but has been in the wealth business since 1980. Naratil reckons he is the bank’s most energetic client person in the US.
“While so much has changed, it’s still about trusted relationships,” says Hull. “What has changed is how you develop those relationships. We have an obligation to interact with our clients the way they want us to, not to fit them into a certain box.”
And those clients are more varied than ever. In 2020 the bank established a group targeted at supporting athletes and entertainers, aimed at giving them the knowledge they need to manage their resources and leave a worthwhile legacy to their communities. It also launched an initiative to educate younger investors, with 20,000 signing up. At the other end of the spectrum, the bank opened six new private wealth hubs across the US to focus on clients with more than $25 million to invest and expanded its family office solutions group for those clients with more than $100 million.
The work we had done with clients on getting them to think about liquidity, longevity and legacy saved them from panicking
Tom Naratil
Naratil also points to the importance during the pandemic of UBS Wealth Way, an approach the bank has promoted as a way of guiding clients through every facet of their financial lives through three strategies. Adoption of Wealth Way by households with more than $1 million of assets to invest nearly doubled during the year.
“Financial market theory says that you should be a rational economic being and have a wonderfully diversified portfolio,” he says. “But humans are emotional, with a mix of fear and greed. So how do you adapt the theory to something that people can understand?
“We found that the work we had done with clients on getting them to think about liquidity, longevity and legacy saved them from panicking.”
Those three ‘L’s are the touchstone of Wealth Way and the legacy part was more important than ever for UBS’s clients as issues around race and justice came to the fore during the year. The wealth management team was working with the bank’s community affairs teams more than ever.
“You might expect that philanthropic activity would contract during an environment like the pandemic, but in fact it increased,” says Naratil. “Clients were asking us how they could make a difference. And we were able to match gifts through our Optimus Foundation.”
That same philosophy extended to environmental, social and governance (ESG) concerns. The unit has some 70 people globally doing philanthropic due diligence on organizations to help clients make meaningful impact investments aligned with the United Nations Sustainable Development Goals (SDGs).
Clients can use UBS’s data to assess the areas where they think they can have the biggest effect – Naratil says the result is akin to “venture philanthropy.”
