By Oliver Smith on Friday 28 January 2022
Four years after the investment bank sold off its UK robo-advisor Smart Wealth.
Swiss investment banking giant UBS is back in the digital wealth sector in a big way with the news yesterday that it is looking to snap up US robo-advisor Wealthfront for $1.4bn.
The deal will give a massive boost to the digital ambitions of UBS, bringing it over 470,000 new clients and over $27bn in assets under management.
It also comes less than 12 months after its rival investment bank rival JP Morgan bought Nutmeg in the UK for an undisclosed amount.
At the time of the deal, Nutmeg had 140,000 customers and £3.5bn ($5bn) under management, giving it an average per customer AUM of around $35,700 compared to Wealthfront’s $57,400.
“Adding Wealthfront’s capabilities and client base to our global investment ecosystem will significantly boost our ability to grow our business in the US,” said Ralph Hamers, group CEO of UBS.
“Wealthfront complements our core business in the US providing wealth management to high net worth and ultra-high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors.”
It’s also four years since UBS exited the digital wealth sector after selling off its UBS Smart Wealth platform in the UK, saying at the time that “the near-term potential is limited”.
Smart Wealth’s IP was sold off at the time to US wealth management startup SigFig, a company that builds robo-investment platforms for banks like Santander.
From Wealthfront’s point of view, the deal solves a long-running IPO headache, which has been in the air since as far back as 2017, but never transpired.