UBS getting into the “robo-advice” market, launching an online wealth manager.
UBS SmartWealth will provide real-time financial advice, telling people where to put their money based on goals, means, and attitude to risk.
Clients can open an account entirely online, with no need for paperwork, and are offered access to five investment strategies through a range of active and passive funds created and managed by UBS.
The investment strategies are influenced by UBS’ “House View” — the bank’s outlook on the global economy, based on all its in-house research.
The “robo-advisor” also regularly checks the performance of investments against goals, suggesting alternative strategies if things go off track.
The launch of SmartWealth is a “strategically important move” for the bank, according to Wealth Management COO Dirk Klee, that will help it win over new customers. UBS is the world’s biggest private wealth manager, with $2 trillion of client assets.
SmartWealth is one of a number of so-called “robo-advisors” that are springing up across the globe. These online platforms replace traditional wealth advisors with algorithms and automated advice and investment management.
“Robo-advisors” are one of the hottest areas of fintech at the moment and leading examples include Wealthfront and Betterment in the US and MoneyFarm and Scalable Capital in Europe.
By automating much of the process, these platforms bring the cost of investment management way down and make it accessible to a new market. SmartWealth is no different — investors need just £15,000 to access the service, compared to the £2 million bar usually set for UBS wealth management services.
Dirk Klee, COO of UBS Wealth Management, says in a statement announcing the launch: “UBS SmartWealth is a strategically important move for UBS. It enables us to bring our advice and expertise to a much wider audience, at first in the UK, but in time in other geographies too.”
SmartWealth has been built entirely in-house and UBS says it has been working for a year on the platform in London and Zurich.
Klee says in the statement: “Technology is changing the way financial services are delivered. The launch of UBS SmartWealth shows that digital innovation is not the sole reserve of start-ups. Large market-leading institutions have the resources to research, test and build transformative new products and services.
“This launch is an example of how we can blend the best of UBS with the best of start-up thinking and agility, meaning clients can access new innovations alongside the insight of worldwide investment and wealth planning experts.”
UBS is launching SmartWealth to a small number of clients in the UK in November, before a full roll-out next year.
Jamie Broderick, Head of UBS Wealth Management UK, says in an emailed statement: “The UK is the perfect market in which to launch SmartWealth. The UK has developed a reputation for technology-led innovation in financial services. Regulation in the UK is progressive and has established support for new innovations.
“And over recent years, a significant advice gap has developed in the UK, leaving clear space in the market for a product like SmartWealth.”
Clients will be charged 1.7% of assets for an actively managed investment strategy and 1% of a passive one, according to Bloomberg. The fees fall as the amount invested rises.
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