The Swiss bank is expanding a pandemic-spurred pilot it hopes will entice more wealthy clients to put their money into mandates. To do so, it is trying to replicate in-person empathy online.
Zurich-based UBS has shifted $2.65 billion onto a new platform which helps advisers steer clients into mandates, a top executive told finews.com. UBS' rollout of My Way, the tool, to its advisers last year was first complicated and then later spurred by the pandemic.
«Typically the relationship with clients lives from the experience of seeing each other in person, but clients adapted so quickly last year,» said UBS’ Roberto Rango, head of advisory and sales of client investment specialists in Europe.
It allows clients to feel as if they are customizing their own portfolio out of 50 building blocks, together with their banker. UBS takes care of risk monitoring, performance, and reporting. UBS hit a record in assets last year, but saw its profit margins stagnate because roughly half of the total generate recurring revenue, as finews.com reported in January.
Empathy, Through A Website
The Swiss wealth giant's efforts are a bid to lift the share of money sitting in mandates, which provide a steady and above all highly predictable source of income and profit margin for the bank. One year into the pandemic, it is becoming clear that private banks can no longer rely on seeing their clients regularly in person or wooing prospects at marquee events.
Aite Group's Alois Pirker points to the delicacy of replicating an advisory service online: «getting empathy through a website is really hard – with Covid-19, getting that right is no trivial thing.»
UBS had assumed a younger, tech-familiar high net worth type of client would be the most interested, but «the reality is a rich diversity across different age groups, genders, backgrounds» including ultra-high new worth clients, as well as differences in how they use My Way within their overall wealth construct, according to Rango.
Showing Client Goals
Aite’s Pirker sees so-called goals-based wealth management growing, and says it is more important for banks to show not tell. «It’s integral to connect the goals the clients to the respective investment area, but more importantly to show transparently how you are helping them get closer to achieving those goals.»
He cites Morgan Stanley’s IQ – for impact quotient – a reporting system which illustrates to clients how well their investments match up to their environmental, social, and governance concerns, as another such consultative tool which seeks to tie in clients more inclusively.
My Way: Drop In The Bucket
My Way’s share almost one year in represents a drop in the bucket of UBS’ overall $3.02 trillion in assets at its private bank – but Covid-19 will continue to help. Pirker, the Aite consultant said the online cadence helped by newer, hybrid models will stick after the pandemic eases.
Just over one-third of UBS’ overall assets lie in mandates, but there are dramatic regional differences. The metric stands at nearly 40 percent in the U.S., but at less than 13 percent in Asia, where clients often prefer to eschew mandates in favor of frequently trading.
Rango noted that UBS next wants to add more booking centers – it is currently live for clients in most countries who book their assets in Switzerland and in Asia – as well as new modules. UBS also wants to improve the so-called experience for clients.
