UBS Group AG is planning to restructure its wealth management operations in the United States in order to better serve affluent clients who are just below the ultra-wealthy category. This strategic transformation, outlined in an internal memo, reflects the bank's commitment to improving its performance in the U.S. market.
The changes will take effect on January 1, 2025, and will involve a shift from two national divisions to four regional ones, in collaboration with UBS International and its Wealth Advice Center. The restructuring aims to allocate more resources to wealthy clients, which UBS sees as crucial for its growth in the United States. The bank hopes that by reorganizing its wealth management framework, it can improve client responsiveness, accelerate decision-making processes, and strengthen connections with its clientele. This new arrangement will empower field leaders, enabling them to make quicker decisions and respond more effectively to client needs.
UBS's wealth management division is a significant part of its business, contributing over 50% of the bank's total revenues. The bank is focused on enhancing services for both affluent and ultra-wealthy clients. In addition to the upcoming structural changes, UBS is pursuing other initiatives to strengthen its wealth management capabilities.
Discussions are underway to establish a joint venture in India with 360 One WAM, a Mumbai-based firm, which would expand UBS's reach to high-net-worth individuals in that market. UBS has also created a new division called GWM Solutions, which aims to consolidate various products and services for clients. This division will offer a comprehensive suite of services, including investment management, lending, family and institutional wealth management, and alternative investments. These initiatives demonstrate UBS's commitment to providing tailored solutions that meet the diverse needs of its affluent clientele.
UBS's strategic moves in wealth management come at a time when other financial institutions are also looking to enhance their offerings in this sector. For example, Stifel Financial Corp. is reportedly in talks to acquire B. Riley Financial's wealth management business for over $100 million. This potential acquisition aligns with Stifel's growth strategy to expand its footprint in the wealth management sector. Similarly, Citizens Financial Group has plans to accelerate the growth of its wealth management business by attracting new high-net-worth clients. The bank's long-term strategy includes enhancing its wealth management capabilities and expanding into key markets, reflecting a broader trend among financial institutions to capitalize on the growing demand for wealth management services.
Despite ongoing market fluctuations, UBS's stock performance has shown resilience, with shares gaining 1.8% over the past six months, in contrast to a 5.4% decline in the broader industry. This positive trajectory reflects the bank's strategic focus on wealth management, which remains a critical driver of its overall revenue. As UBS prepares to implement its transformation plan, the emphasis on affluent clients could position the bank favorably in a competitive landscape. By enhancing its service offerings and operational efficiency, UBS aims to solidify its status as a leading player in the wealth management sector, catering to the evolving needs of its diverse clientele.