February 26, 2024



UBS manages about $5 trillion in assets globally after buying Credit Suisse in June Consolidated its position as the world’s top wealth management institution.

But when executives at the Switzerland-based bank set their sights on the U.S. market, they still saw some advantages.

Like many of its peers, UBS has coveted steady management fees and income from client savings. Its hiring this year has already secured teams of consultants from the following firms: Bank of America Merrill Lynch Wealth Management, JPMorgan recently acquired First Republic and others as it tries to increase its stability by Mastermind for the super rich.

From the last quarter of 2022 to the first quarter of this year, UBS’s number of advisers in the Americas, the vast majority in the United States, fell by about 2% to 6,147. John Matthews, head of private wealth management for the Americas at UBS, said the current opportunity for financial planners may be underestimated.

“We’re in an industry where our potential customer base is growing faster than our industry as a whole,” he said. “It’s a good industry. Most people don’t realize it.”

Matthews estimates that the population with $30 million or more in investments will grow by at least 10% over the next five years. UBS, with its global reach, can at least serve them as well as anyone else.

Matthews recently sat down with Financial Planning to discuss UBS’ plans to hire wealth managers and advisors in the U.S. (This interview has been edited for brevity.)

Financial plan: Why are you optimistic about UBS’s wealth management prospects in the US?

John Matthews: The reason I say this is that we happen to focus primarily on high net worth and ultra high net worth clients. Those customer groups are really accelerating growth right now. Therefore, the richer the more people will be. Their wealth is increasing, more than that of the less wealthy. So the population of millionaires is not growing as fast as the population of millionaires. That’s a big focus for us in the US.

In particular, our private wealth business, which caters to ultra-high net worth clients, we conservatively expect our assets to continue to grow at a rate of 10%+ per year.

FP: What are you doing to attract as many customers as possible?

Jamie: We are constantly working to retain and attract the best team of financial advisors and all the support and strategies that go with it. So it’s not just an advisor issue. It’s all about having the right support functions in place, like trusted estate lawyers, experts focused on family dynamics, philanthropy, and of course all investment capabilities, because we’re spending more time now in the private equity space, the hedge fund space, and sometimes on the more complex types of investments that these clients are looking for.

We have a very strong family advisory and philanthropy team. These groups have all experienced phenomenal growth over the past 10 years. We started out with just one guy doing family counseling and philanthropy. Today we have 16 of them. Ten years ago we had four trust and estate attorneys. Now we are in our 30s.

FP: What are you doing to build your consultant team?

Jamie: The most important part of our strategy is to retain our current employees, because we have a very strong private wealth advisors.

The second part of that strategy is to attract other very talented people in the industry, whether they come from traditional wealth management firms, or private banks, or RIAs. We did survey across the industry to determine, “Who is really good at working with these types of clients and the complexity that comes with it?”

FP: Why is America such a hotspot for wealth growth?

Jamie: First, we note since 2010 that a very low interest rate environment was created due to the last financial crisis and a lot of quantitative easing. Those who can take advantage of these. So you can buy real estate and make a lot of money. You can invest in the market and use leverage to make a lot of money in the market. If you are a business owner, you can buy a business and potentially run it, or sell it and build another due to lower interest rates.

That’s why we’re seeing the rich get richer at an accelerated rate. For example, the $100 million customer base is expected to grow by 10.5% over the next five years, while the million-dollar customer base is expected to grow around 5%. This has been happening for the past decade, and it’s accelerating.

But no one figured it out. Five or six years ago, I started doing some really high-end work. I found that 40 years ago, there were 12,400 people with $100 million in liquid net worth. Their population is growing at a rate of around 8% per year. There are now 36,800 people with a net worth of $100 million and an increase of over 10%.

FP: We hear a lot about “big wealth transfer“—the younger generation is about to inherit a lot of money. What opportunities does this present for UBS?

Jamie: Initially I was a little skeptical about wealth transfer because when people talk about it, they’re talking about the next 40 or 50 years. They throw out numbers like $80 trillion or $60 trillion. Frankly, it was too long, or almost too much money, for me. Like, who really knows?

But if you look at baby boomers, there are 71 million baby boomers in the United States right now. I think the average age is 73, and if you do a weighted average, that means a lot is going to happen between now and the next eight to seven years. They have to start making decisions about what to do with their succession planning, their business strategy (if they still own a business) and how they will pass on their wealth. So it’s not a 20 or 30 year question. In my opinion, it’s a seven-year problem.

So I think over the next seven years, my calculations for other companies that I’ve worked with show that at least $18 trillion will be passed down from generation to generation.

So what’s happening is a wealth wave, because the baby boomers control about 60% of the wealth in the United States, this huge wealth transfer is real. We are in it now.

FP: What are you doing to reach these and other potential customers?

Jamie: Well, for some of them, the client came with consultants that we hired from afar. Most of our consultants acquire new clients through referrals from 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 our clients, they’ll probably tell all their friends. The other thing is, over 80% of the new assets in our U.S. business are first-generation wealth. It’s not fifth or sixth generation wealth. Usually baby boomers, as they have spent their entire lives amassing wealth or business. These are business owners, and they’re looking for help. We want our consultants to help them better than any other company.