With roughly $5 trillion in assets under management globally following its acquisition of Credit Suisse in June, UBS has
But when executives at the Switzerland-based bank look to the U.S. market, they still see some ground to gain.
Like many similar institutions, UBS has been coveting the steady management fees and revenues that come from tending to clients' savings. Its recruitment efforts this year have seen it acquiring advisory teams from
UBS's headcount for advisors in the Americas — the vast majority whom are in the U.S. — fell by about 2% to 6,147 between the last quarter of 2022 and the first quarter of this year. John Mathews, the UBS head of private wealth management in the Americas, said the current opportunities for financial planners are perhaps underappreciated.
"We happen to be in a business where our underlying client base is growing faster than we are as an industry," he said. "That's a good business to be in. Most people don't realize that."
Mathews estimates that the segment of the population with $30 million or more to invest will grow by at least 10% in the next five years. UBS, with its global reach, is in at least as good a position to serve them as anyone.
Mathews recently sat down with Financial Planning to discuss UBS's plans for wealth management recruiting and advisors in the U.S. (This interview has been edited for brevity and clarity.)
Financial Planning: Why are you optimistic about UBS's wealth management prospects in the U.S.?
John Mathews: The reason I say that is we happen to focus primarily on high net worth and ultrahigh net worth clients. And those client segments are really growing at an accelerated rate right now. So wealthier people, there's going to be more of them. And their wealth is expanding, more so than someone less wealthy. So the millionaire population is not growing as fast, say, as the hundred millionaire population. And it's a key focus of ours in the United States.
Especially in our private wealth business, which is the group that caters to the ultrahigh net worth clients, we expect our assets to continue to grow at over 10% a year, conservatively.
FP: What are you doing to attract as many of those clients as you can?
JM: We've been focused on retaining and attracting the best financial advisor teams and all of the support and strategies that go along with them. So it's not just only about the advisor. It's about having the right support functions, like trusted estate attorneys, specialists who focus on family dynamics, philanthropy and, of course, all of the investment capabilities as well now that we're spending more time in the private equity space and hedge fund space and sometimes more of the more complex types of investments that these clients are looking for.
We have a very robust family advisory and philanthropy team. These groups have all grown pretty dramatically for the last 10 years. We started out with one person in family advisory and philanthropy. We have 16 today. Ten years ago, we had four trusts and estate attorneys. Now we're over 30.
FP: What are you doing to build your advisory teams?
JM: The most important part of our strategy is keeping the people we have because we have really strong private wealth advisors.
The second part of the strategy is to attract other very talented people in the industry, whether they come from traditional wealth management firms, or they come from private banks, or they come from RIAs. We're looking really across the entire spectrum of the industry to say, 'Who are really good at working with these types of clients and the complexities that come with them?'
FP: Why is the U.S. such a hotspot for increasing wealth?
JM: So first of all, what we've noticed since 2010, was that because of the last financial crisis, and a lot of quantitative easing, that created an environment of very low interest rates. And people who had the means were able to take advantage of those. So you could buy real estate and make a lot of money. You could invest in the markets and use leverage to make a lot of money in the market. If you were a business owner, you were able to buy a business and maybe run that business or sell and build another business because of low rates.
That's why we see this acceleration of the wealthier getting wealthier. So, for example, the $100 million client segment is expected to grow at 10.5% over the next five years, compared to the million-dollar client segment that's expected to grow at about 5%. And that's been going on for the last decade and has been accelerating.
But nobody figured it out. I started doing some work on the really upper end five, six years ago. And what I found was that 4 years ago, there were 12,400 people who had a $100 million liquid net worth. And they were growing at about 8% a year, that population. Well, now there's 36,800 people who have a $100 million net worth, and it's growing over 10%.
FP: We hear a lot about the "
JM: I was a bit skeptical of the wealth transfer initially, because when people talk about it, they talk about the next 40 years or 50 years. They throw out numbers like $80 trillion or $60 trillion. And frankly, to me, that was too long, or is almost too much money. It's like, who really knows?
But if you do the research about the baby boomer generation, there's 71 million of them in the United States right now. I think the average age is 73, if you do a weighted average, which means between now and the next eight to seven years, a lot of things are going to happen. They have to start making decisions about what they're going to do with their succession plan, their strategy with their business — if they still own one — and how will they pass on wealth. So this is not a 20- or 30-year issue. This is a seven-year issue, in my view.
So I think over the next seven years, the calculations that I've looked at at other firms that I've worked with on this is at least $18 trillion will pass from one generation to the next.
So what's happening is a kind of wealth wave, because baby boomers control about 60% of the wealth in the U.S. This great wealth transfer is real. We're in the middle of it right now.
FP: What are you doing to reach out to these and other potential clients?
JM: Well, for some of them, the clients come over with the advisors that we hire from afar. And most of our advisors, they get their new clients through introductions of existing clients. It's really not a cold-calling business anymore. It's all done through introductions.
And, you know, if we do a good job for a client, they probably tell all their friends about it. And the other thing about it is that over 80% of our new assets that come into our U.S. business is first-generation wealth. It is not fifth- or sixth-generation wealth. And it's usually baby boomers, because it's taken their lifetime to build up this wealth or their business. And so these are business owners, and they're looking for help. And our hope is that our advisors do a better job helping them than other firms.
