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UBS to Merge U.S. Global Wealth Management Units

The Swiss bank said local client service and advisor models will be maintained and benefit from integrated middle- and back-office functions.

UBS is merging its U.S. and global wealth management businesses in what executives called a “natural next step.” 

Sergio Ermotti, CEO of UBS Group AG, said, during the Swiss Bank’s fourth-quarter earnings presentation on Monday, that combining UBS Wealth Management and Wealth Management Americas will enable the bank to leverage synergies in its investments, technology and new products. He also said the merger will allow the bank to more effectively leverage the purchasing power of the $2.3 trillion in the client assets it manages.

“There has never been a greater need, or opportunity, to provide our clients with global, fully diversified products and services and a true multi-shore offering,” Ermotti said.

The local client service and advisor models will be maintained, the bank said. But the new division will benefit from single finance, risk and legal organizations and middle- and back-office functions will be combined.

The bank has been more closely aligning the two wealth management units over the last two years. Segments within each that were already more globally minded, such as the Chief Investment Office and the Ultra-High-Net Worth and Family Office, have already been reorganized into more singular, global organizations, Emrotti said.

The CEO also said wealth management will “likely make small acquisitions” to build its presence in attractive locations and segments. He didn’t specify whether that meant recruiting individual advisors and teams or larger wealth management businesses.

Global Wealth Management’s profit before tax was up 18 percent year-over-year in the fourth quarter of 2017, as operating income increased 6 percent and expenses increased by 2 percent.

Wealth Management Americas’ profit before tax was up 9 percent year-over year in the fourth quarter of 2017. Net new money to Wealth Management Americas was negative (less that 1 percent) in 2017, although Kirt Gardner, CFO of UBS Group AG, said that was largely due to lower net recruiting during the last year.

This story is developing.

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