UBS is in the early stages of planning to offer wealthy customers digital currency investments, joining U.S firms in seeking to give broader access in response to client demand.
The Swiss firm is exploring several alternatives for offering the asset class, people familiar with the plan said. Any investment offering would be a very small portion of the clients’ total wealth because of the volatility, while options include investing through third party investment vehicles, one of the people said, declining to be identified as the details are private.
More global securities firms are offering cryptocurrency services. Goldman Sachs is pushing deeper into the $1 trillion Bitcoin market and opened up trading with non-deliverable forwards, a derivative tied to Bitcoin’s price that pays out in cash. Morgan Stanley plans to give rich clients access to three funds that will enable ownership of crypto and BNY Mellon is developing a platform for traditional and digital assets. Citigroup is also considering crypto services.
“We are monitoring the developments in the field of digital assets closely,” UBS said in a statement. “Importantly, we are most interested in the technology which underpins digital assets, namely the distributed ledger technology.”
It’s a significant pivot for the robo advisor, which has historically advocated passive, ETF-driven investing.
Bitcoin remains the biggest crypto-currency but momentum in other tokens is drawing increased interest. Supporters have argued that investors are getting more comfortable with a variety of tokens, while critics say the sector may be in a bubble. UBS is concerned that it may lose clients if it doesn’t offer the investment to its wealthy clients, the people said.
Local rival Julius Baer Group’s CEO Philipp Rickenbacher said last week at a conference that the wealth manager was looking at working with partners to offer clients access to crypto assets, though for now doesn’t plan to execute its own Bitcoin-related transactions.
UBS CEO Ralph Hamers is taking a deep look at where he can both cut costs and digitize operations, including the high-touch business of serving the world’s wealthiest. He wants to use artificial intelligence to target how to sell more products to the world’s wealthy and is changing the way the bank spends on technology projects to a more flexible quarterly allocation from fixed funding on a yearly basis. The bank spends approximately $3.5 billion per year on technology to maintain and modernize its existing infrastructure and innovate new tools for employees and products for clients.
