Summit News

UBS aims to grow in ultra-rich market

GENEVA (Reuters) - UBS, the top bank to the super wealthy, aims to grow assets in this segment twice as fast as the market, as it recovers from a credit product binge and a U.S. tax fraud probe that triggered massive client withdrawals.

Josef Stadler, UBS Global Head of UHNW gestures during the Reuters Global Wealth Management Summit in Geneva, October 4, 2010. Reuters/Valentin Flauraud

“We are the market leader and so we command an ambition that is to grow two times the market, which is above 7 to 8 percent annually in terms of invested assets,” said Josef Stadler, global head for the ultra high-net worth (UHNW) segment at Switzerland’s biggest bank.

UBS’s ultra-rich client segment, made up of customers with more than $50 million of investible assets, is worth $300 billion, nearly 40 percent of the bank’s total private client assets outside the United States.

The bank was hit hard by the credit crisis and lost market share to rivals such as Credit Suisse. But under the leadership of Chief Executive Officer Oswald Gruebel UBS has started to curb client outflows.

Stadler told the Reuters Global Private Banking Summit that his segment had already turned the tide by attracting new net inflows in the first and second quarter of this year.

“Looking back, we lost less in proportion (in the ultra-rich segment) than in the (less wealthy) high net-worth space and we are back faster,” he said at the Summit, taking place at Reuters offices in Singapore, Geneva and New York.

Stadler said UBS had not turned its back on Europe even though Asia, which already accounts for around 30 percent of assets belonging to the super rich, is becoming increasingly popular as a wealth management hub.

“Europe is a very attractive market for us,” Stadler said. “We will add new staff (in Europe), by a double-digit number over the next 12 months.”

UBS has 480 client advisors dedicated to the ultra high-net worth segment, managing an average of $450 million each, but is looking to increase that figure to $500 million.

Stadler said rich clients who were badly burned in the credit crisis were however still heavily into cash, with an average of 33 to 35 percent held that way.

Alternative assets, on the other hand, had lost appeal and made up a maximum of 15 to 20 percent of a client’s portfolio.

Editing by Mike Nesbit and David Holmes