UBS had 2 multi-billion-dollar clients pull their money out of its massive Americas wealth business, driving overall fourth-quarter outflows
Two large UBS clients withdrew money from the bank's wealth management arm in the Americas during the fourth quarter. One of the clients had an account between $3 billion and $4 billion, while the other was between $1 billion and $2 billion, a person familiar with the matter said. Those outflows helped explain the bulk of the overall unit's $4.7 billion fourth-quarter outflows that the Swiss bank reported in its earnings on Tuesday. The wealth management unit's adviser force meanwhile shrank again. The firm had 10,077 advisers globally as of December 31, a 6% drop from one year earlier. Visit BI Prime for more wealth management stories.
Two ultra-wealthy clients pulled money out of UBS wealth business in the Americas late last year, driving the lion's share of a global $4.7 billion in outflows from the bank's wealth management arm during the fourth quarter, according to a person familiar with the matter. One of the clients had an account between $3 billion and $4 billion, and one was between $1 billion and $2 billion, according to the person, who requested anonymity to discuss a private matter. The Swiss bank's wealth management business, which is the world's largest, reported its Asia-Pacific and Switzerland regions had net inflows, finance chief Kirt Gardner said on a call to discuss earnings with analysts early Tuesday. Those two Americas clients were "very low-margin accounts," Gardner said, suggesting they were not accounts that were immediately profitable to the business. He highlighted that full-year net new money of $31 billion was "particularly strong" into Asia-Pacific, a region where the wealth management unit hopes to expand. In the third quarter, net new money for the unit totaled $15.7 billion. Global wealth management — one of the bank's four business lines along with personal and corporate banking, asset management, and investment banking — has been a main focus under chief executive Sergio Ermotti and wealth co-heads Tom Naratil and Iqbal Khan.
Khan, who joined last year from Swiss competitor Credit Suisse, and Naratil are aiming to increase the unit's efficiency through a broad business reorganization across regions. UBS has long been a leader in managing money of the world's ultra-wealthy clients, and has more recently emerged as the firm's more stable business while its investment bank struggles. The firm earlier this month said it was overhauling its global wealth management division with structural changes across regions, according to a company memo reviewed by Business Insider, after similar changes were made in the US. It's all an effort to expand its menu of specialized client offerings, particularly bespoke family office services, and speed up advisers' decision-making and productivity through a closer relationship with investment banking. It was widely reported earlier this month that the unit would slash hundreds of jobs to cut costs. On the firm's Tuesday call, Gardner called the global family office group "one of our highest-growth opportunities" for the wealth management unit. The wealth management unit's adviser force meanwhile shrank again during the fourth quarter. The firm had 10,077 advisers globally as of December 31, a 6% drop from one year earlier. Overall staff within the business fell by 4% to 22,681 employees. Some large adviser teams, some of whom oversaw $1 billion or more, left the firm last year for smaller shops or rival firms. Peer US wealth managers Wells Fargo, Merrill Lynch, and Morgan Stanley have all seen similar exits. One UBS team managing some $7.5 billion in assets left to join RBC Wealth Management in California last month, and earlier in 2019 a team overseeing $1 billion in client assets left for Rockefeller Capital Management. UBS has meanwhile made some notable US recruits, including a large North Carolina-based private wealth team, formerly with Merrill Lynch. The team oversees some $10.8 billion in client assets. As Business Insider reported over the summer, UBS has pulled together a new group to help its wealth advisers provide a "family-office"-like experience, and that comes as the bank works to make good on raking in $70 billion in new US assets over three years. Read more: UBS is bringing back a junior analyst role in its wealth management arm as the industry grapples with recruiting fresh talentJoin the conversation about this story » NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.
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The coronavirus pandemic has spooked investors. A financial adviser can help in decision-making and sticking to...The coronavirus pandemic has spooked investors. A financial adviser can help in decision-making and sticking to a financial plan. Business Insider has highlighted the UK's top financial advisers to watch in 2020. Click here for more BI Prime content. The coronavirus pandemic has interrupted stock markets and made many investors wary about the best way to manage their money during these tough times. A financial adviser can help define a strategy and ensure you keep to it, but it can be hard to choose one. The latest data from the Financial Conduct Authority, the UK regulator for financial services, indicates only one in 10 adults seek financial advice when making investment decisions. The recent market volatility may push more toward professional advice, leaving many to question how to choose the right person. Business Insider has sifted through financial-adviser trade awards and review websites to highlight the most praised and promising people and brands to manage your money — and they are all open for business despite the coronavirus lockdown.SEE ALSO: British investors have flocked to DIY platforms with the coronavirus shaking global markets, but financial advisers warn of big risks Gemma Siddle, Eldon Financial Planning Siddle had planned to become a lawyer but joined Eldon more than a decade ago instead. She has built a bustling award cabinet since, with trophies from the Personal Finance Society for paraplanner of the year in 2012 and chartered financial planner of the year for 2019. She was also included in New Model Adviser's top 35 next-generation advisers each year from 2016 to 2019. "We have provided a remote service for several years and were able to adapt to remote working without any interruption to our service," Siddle said. Angela Marson, Fairstone Fairstone is one of the highest-rated UK financial advisers on the reviews website Trustpilot, with a score of 4.9 out of 5 from more than 3,000 reviews that praised its service and knowledge. It is one of the UK's largest chartered-financial-planning firms, with 600 advisers and staff members spread across 48 UK locations. "Clients have been happy to embrace the new approach to virtual meetings," Marson, a chartered financial planner at Fairstone, said. "My time is actually spent more effectively with clients, removing the time taken to travel to meetings, which has helped me as an adviser, to assist more clients." Kyle Nethercott, Hazlewoods You don't need to be a big brand to make a big impression. The Gloucester-based adviser Hazlewoods Financial Planning came 13th in the trade title FTAdviser's top 100 financial advisers for 2019 — a list dominated by large firms. The awards assess how qualified staff members are, their experience in different economic environments, as well as the value of investments that came in and out of the business over the year. It may have a small team of four advisers, but Hazlewoods still advises clients across the UK, and its management, including the financial-planning partner Nethercott, has decades of experience. "Our clients know they can contact us if needed, and we are conducting many meetings via telephone instead of the usual face-to-face," Nethercott said. Pete Matthew, Jacksons Wealth Management Matthew is the managing director of Jacksons Wealth Management. He launched one of the first personal-finance-focused podcasts in the UK and has a strong social media and web presence with his Meaningful Money financial-education brand. "I've been using Zoom video to talk to clients around the country for years now," Matthew said. "I've never met most of my clients in person, so that hasn't been an adjustment." Andy Hart, Maven Adviser Hart is the founder of Maven Adviser and is a respected financial-planning podcaster. He has also launched Humans Under Management, a series of events focusing on the behavioral-finance aspects of investing rather than just products and performance. "I've been remote-ready for close to a decade," he said. "Lockdown has caused a lot of disruption with the companies I use, but we're still taking on clients and servicing our existing clients." Barry Horner, Paradigm Norton Paradigm Norton, with offices in London, Torquay, and Bristol, is a serial industry-award winner, picking up regular accolades from trade titles such as Money Marketing and New Model Adviser that praise the way it works with clients. It is a Certified B Corporation, which means it must maintain certain social and environmental performance targets and balance profit and purpose. It also has its own impact-investing arm. "The week before lockdown the entire team of some 70 professionals were all successfully home working, and, other than the ability to schedule 'face to face' meetings, we were fully operational," Horner, its chief executive, said. "We have emailed our clients with regular and helpful updates, which has been hugely appreciated." Darren Sharkey, Quilter Financial Planning The nationally focused adviser Quilter Financial Planning came on top of FTAdviser's top 100 financial advisers for 2019. Its ranking suggests you get access to well-qualified, experienced support among its thousands of advisers. The team is led by Sharkey, who has worked within Quilter for more than 20 years. "Now more than ever, clients need to be able to contact their adviser and be reassured that their finances are in safe hands," Sharkey said. "Our advisers have tools and resources to offer advice remotely." Darren Cooke, Red Circle Financial Planning Cooke was one of the first to call for a ban on pensions cold calling to stop people from getting scammed. He started his own campaign in 2016, and the government went on to introduce a ban in January 2019. This indicates he is someone who cares for his client's well-being. "Clients are still receiving the same high-level service they did before," Cooke said. "The main part that has really changed has been replacing meetings with video calls, but so far that has worked really well." Tim Sargisson, Sandringham Financial Partners Sandringham Financial Partners was the top-rated firm on the adviser search engine VouchedFor in 2019 based on the number and level of reviews it received. Out of 1,974 clients, the national advice firm received 1,828 five-star ratings, 136 four-stars, and 10 three-star reviews. "Clients value you for your ability to provide reassurance and help deliver their goals," its CEO, Tim Sargisson, said. "The other critical part is how you deliver your service and our tools help advisers deal with clients remotely." Lisa Johnstone, VWM Wealth Johnstone's team picked up the trophy for chartered firm of the year at the Personal Finance Society's 2019 awards, which cited the way it engaged with charities, sought feedback from clients, and developed new financial advisers. It also offers its own range of ethical portfolios. "Our main method of contact is telephone and also Zoom for meetings, in line with our family office approach," Johnstone said. "Our newsletters are forward looking, whilst reinforcing some key messages and our outlook. "Being close to the families we work with means that current market events are expected, not predicted, but they are a normal part of the financial-planning journey."
Wealth management giant Merrill Lynch wants its worst-performing markets to catch up and just created a new role to oversee their progress
Merrill Lynch, Bank of America's wealth management arm, has created a new role, the national business...Merrill Lynch, Bank of America's wealth management arm, has created a new role, the national business development executive. It's appointed a former market executive, Craig Young, to the post. Young will focus on leveling advisers' performance across the US, aiming to ensure that "there's not much distance between our best-performing and our worst-performing markets," said Andy Sieg, the president of Merrill Lynch Wealth Management, told Business Insider in an interview. Visit BI Prime for more wealth management stories. Bank of America's wealth management business has created a new leadership position to help its less successful wealth adviser markets catch up with its strongest performers. Merrill Lynch Wealth Management on Tuesday named Craig Young, previously a market executive with the firm on the East Coast, as its first national business development executive. Young will be based in New York and report to Andy Sieg, the president of Merrill Lynch. He'll focus on leveling advisers' performance across the US, aiming to ensure that "there's not much distance between our best-performing and our worst-performing markets," Sieg said in an interview with Business Insider on Tuesday. Merrill and its wirehouse rivals have dialed way back on recruiting experienced financial advisers, and have instead focused on boosting productivity from their existing headcount. Sieg said that the new position will be focused on staying on top of performance across the country's many markets and making sure that local leaders are being held accountable. "At the market level, there's substantial difference in terms of how strongly we're performing," he said. A spokesperson declined to provide examples of markets with disparate performance levels. More generally, market executives tend to track measures including market profit and loss, customer acquisition and growth revenue. Young will be responsible for bringing consistency across the 105 markets the wirehouse has across the US. Market executives will continue to drive their own markets, but Young's role will be to help them devise better execution plans and hold them accountable. "We created a several-day program to help enhance the skills of market executives. We followed that up with the creation of market plans so that each of our 105 markets is operating against a written plan," Sieg said. "This is now kind of a next step, which is how do we actually build a function into our organization that's helping us create that level of consistency?" Young, who was previously the market executive for the area that encompasses Westchester, New York and Greenwich, Connecticut, joined Merrill in 2015 as an associate market executive in Los Angeles. He later served as the market executive in Pasadena, California from 2016 to 2018 before moving to the New York area. He'll now oversee internal organizations including Merrill Lynch's Advisor Growth Network and the Market Executive Strategy Council, which partly aim to forge communication between financial advisers and business leaders. Merrill Lynch reported some $2.6 trillion in client assets and around 17,400 financial advisers and financial solutions advisers as of December 31. Young will travel to different markets and spend time with local leaders "in their markets, and in their offices, so that he can keep a close pulse on how the strategy is being executed" on the ground, Sieg said. Before Young got into the wealth management business, he earned his bachelor's degree in business administration from California Polytechnic State University, where he played football as a running back. "As a young kid, I wanted to do something in business," he told the Los Angeles Sentinel newspaper in 2015. "Football was my passion but as a college student, I was also interested in finance. I felt that business would allow me to bring who I am into what I do and to put my best skill sets to work." Like its traditional wealth management competitors, Merrill Lynch has grappled with the industry's changing relationships and roles. The business isn't attracting newcomers like it used to, and firms are focusing heavily on recruitment and robust internal training efforts to draw top talent and show them the ropes. Business Insider first reported last month that Merrill Lynch is expanding the scope of its training programs, opening up development resources to its 6,500 client associates. More than 111,500 advisers will retire in the next decade, representing more than one-third of industry adviser headcount and assets, according to estimates from the industry research firm Cerulli Associates.SEE ALSO: https://www.businessinsider.com/bank-of-america-merrill-lynch-wealth-management-changing-training-program-2020-1 SEE ALSO: The head of Merrill Lynch says the firm has zero interest in buying a robo-adviser — and that comes as wealth-tech startup launches are plummeting Join the conversation about this story » NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.
The head of Merrill Lynch explained why the firm has zero interest in buying a robo-adviser — and it shows how buzzy wealth-tech startups are in a tricky spot
The head of Bank of America's wealth management business, among the largest in the US, said...The head of Bank of America's wealth management business, among the largest in the US, said on Wednesday that his unit was not planning to acquire a robo-adviser. Investment-focused tech startups "mainly had their heyday in the mid 2010s and learned some hard lessons along the way," the Deloitte Center for Financial Services said in a report published Wednesday. "As a result, many have shifted to a business-to-business (B2B) model, merged with incumbents, or simply disappeared." Andy Sieg, the president of Merrill Lynch Wealth Management, told Business Insider that the unit is focused on investing in Merrill's existing technology and trying to ensure that its thousands of financial advisers are incorporating the full menu of tech into their practices. That thinking highlights how standalone robo-advice and wealth-tech firms may be in a tricky spot as legacy firms invest in their own technology. Meanwhile, the pipeline of new startups in the space has ground nearly to a halt. The firm has also doubled the number of its "digital specialists," from 15 to 30, who are responsible for guiding advisers on how best to harness new technology. Visit BI Prime for more wealth management stories. The head of Bank of America's massive wealth management business said on Wednesday that buying a robo-adviser was not in the cards for the unit. Andy Sieg, the president of Merrill Lynch Wealth Management, said the unit is focused on investing in Merrill's existing technology, which includes its own self-directed investing tool, and trying to ensure that its thousands of financial advisers are incorporating the full menu of tech available to them into their practices. "The best road to the future for us is continuing to invest in our own platforms, and ensure that they're leading the marketplace in terms of capabilities," Sieg, who has led the business since 2017, told Business Insider. That thinking highlights how standalone robo-advice and wealth-tech firms may be in in a tricky spot as legacy firms invest in their own technology. Meanwhile, the pipeline of new start-ups has ground nearly to a halt. "They mainly had their heyday in the mid 2010s and learned some hard lessons along the way," the Deloitte Center for Financial Services said of the fintechs it broadly groups as "invest-techs" in a report published on Wednesday. "As a result, many have shifted to a business-to-business (B2B) model, merged with incumbents, or simply disappeared." The San Francisco-based startup SigFig, for its part, has pivoted in recent years from a business-to-consumer to a B2B business model. Meanwhile the number of invest-tech firms coming to the market has dwindled since a post-financial-crisis peak of 81 in 2014, according to Deloitte's report. Just four launched in 2018, and only one debuted last year. "As invest-techs mature, they are now tasked with striking the right balance between collaboration and competition to secure their place at the forefront of the industry," Deloitte's team wrote. The global head of financial technology banking at RBC told Business Insider earlier this month that while some robo-advisers' growth has been quite impressive, "to make the business models work, it's predicated on AUM levels that are much higher than where they sit today." At the same time, legacy wealth managers like Merrill Lynch and peers like Morgan Stanley have to grapple with attracting a new generation of wealth and brokerage customers accustomed to cheap, automated transactions with brands that only emerged in the wake of the global financial crisis. Some 72% of Merrill Lynch clients are actively using Merrill Lynch and Bank of America's online or mobile platforms, Sieg said on Wednesday after Merrill and parent Bank of America reported fourth-quarter earnings results. Within that base, the number of clients using the MyMerrill app — separate from its self-directed offering — rose 44% in one year. Last year, the business launched new digital features for clients, including the ability to scan and upload documents into the MyMerrill app, as well as sign documents directly with the app and send them to advisers. The firm has also doubled the number of its "digital specialists," from 15 to 30, who are responsible for guiding advisers on how best to harness new technology. Join the conversation about this story » NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.