UBS embarks on an extensive recruitment drive to bolster its team of wealth managers specializing in serving affluent Americans
UBS, in its pursuit of expanding its wealth management division and capturing the affluent American market, has embarked on a significant hiring spree for wealth managers. The bank's hiring efforts come despite its consideration of cutting 30% of its global workforce following the takeover of Credit Suisse.
In the first half of the year, UBS recruited 50 financial advisers, including professionals from esteemed institutions such as Bank of America's Merrill Lynch, JPMorgan Chase's recently acquired First Republic Bank, Citigroup, and Wells Fargo. Thirty of these hires occurred after the announcement of the Credit Suisse deal in March, with the largest addition being the 13-person team from Merrill, known as BG Group, which managed $2.5 billion.
Although UBS became the world's second-largest wealth manager through the Credit Suisse acquisition, it currently holds the fourth spot in the United States. The ultra-rich financial management market in the U.S. is primarily dominated by American banks. Recognizing the growth and significance of the U.S. wealth market, Iqbal Khan, UBS' President of Global Wealth Management, emphasized the bank's commitment to investing in and expanding its business in the country.
To underscore the importance of the American market, Khan personally met with high-net-worth clients in southern California on the day the historic Credit Suisse deal was closed. He also led an internal event honoring UBS' top-performing financial advisers.
The acquisition of Credit Suisse did not impact UBS' wealth business in the U.S. as Credit Suisse had exited U.S. private banking in 2015, transferring its financial advisers to Wells Fargo.
UBS has experienced significant growth in its ranks of private wealth advisers in the U.S., particularly those catering to ultra-high-net-worth clients, with a growth rate exceeding 25% over the past three years. While the bank did not disclose the number of advisers based in the U.S., it reported having 6,147 advisers in the Americas region in late March.
Global banks are increasingly focusing on wealth businesses that provide stable fees and offset the volatility of other operations like investment banking and trading. UBS, like its peers, is prioritizing the ultra-high-net-worth client segment, which is expected to experience substantial growth over the next five years.
UBS aims to attract and retain advisers skilled in serving this population, recognizing the rapid expansion of millionaires worldwide, particularly in the U.S. According to a Credit Suisse report, the number of individuals with net worths above $50 million grew over 50% between 2019 and 2021, with over half of them residing in the U.S.
Wealth management plays a crucial role in UBS' financial performance, with the bank projected to generate 63% of its profits from this division within four years, as estimated by Morningstar analyst Johann Scholtz. UBS shares have shown gains of 6.5% this year and 17.5% over the past 12 months.
In its efforts to solidify its position in the U.S., UBS is focusing on the transfer of wealth from baby boomers to their heirs in the coming years. The bank is diversifying its adviser workforce in terms of age and race, and organizing events catering to multiple generations of wealthy families.
UBS estimates that approximately $18 trillion will be passed down to younger generations in the U.S. over the next seven years, with an estimated $84 trillion to follow over the next two decades. Khan views this historic wealth transfer as a tremendous opportunity for UBS to serve an entirely new generation of clients.
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