UBS won the Outstanding Global Private Bank: Asia-Pacific category at the Private Banker.
International (PBI) Global Wealth Awards 2021, held virtually on 8 October, for a combination of its financial and growth performance, powered by past technology and people investments, and its focus on sustainable investment (SI). UBS has US$3 trillion in invested assets and a diversified global scale. But its strong franchise in Asia-Pacific (APAC) is noteworthy for its 15 wealth management offices in 10 locations, including private bankers, and its 30% profit before tax (PBT) contribution to the global wealth management (GWM) business total of US$1.1 billion last year, winning it a trophy at the PBI Awards 2021.It is estimated 70% of the increase in profits at GWM last year came from APAC alone. Profit per client advisor grew more than 110% to US$1.16 million for FY2020 as UBS benefitted from productivity and efficiency gains group-wide that kept its cost-income ratio below 50% helped largely by becoming a more technology-enabled business.
Years of investments in technology and in training staff for high performance are paying off internally – and externally for clients. For instance, the ‘My Way’ platform, launched in Q4 2020, combines digital capabilities with personal interaction. Clients’ tailor-make their discretionary portfolios on an interactive tablet screen with their client advisor. This enhances the client experience (CX) and improves engagement and results. Assets under Management (AuM) via the My Way platform have already exceeded US$2.6 billion globally. They crossed US$660 million in APAC as of Q1 2021. Other digital projects included:
Direct Investment Insights (DII) were launched on the UBS mobile banking app and e-banking website to empower investors with timely, relevant, and actionable investment insights. To prevent overload and enhance personalization clients only get insights based on their financial interests with related trading cases clearly outlined.
Digital plans were accelerated across the board at UBS and steep climbs in client engagement were witnessed. For instance, in Q4 2020 more trades were executed via e-trading versus traditional execution – over 62% of all equity trades were electronic.
UBS placed over 200 virtual events online due to the Covid-19 outbreak. More than 43,000 clients participated. Its sixth ‘Disruptive Technology CEO Summit’ was also held virtually in October 2020, still attracting more than 5,000 global investors.
UBS is also seeking to further grow its client franchise now that live events are once again permitted as pandemic restrictions ease. For instance, it put on the ‘Tech Connect South-East Asia (SEA)’ show in Singapore on 28 June 2021. This connects clients, start-ups, academics and thought leaders to facilitate know-how and capital transfer. Emerging fintech startups can expect exclusive access to a global network of clients, investors and expertise, creating win-win partnership possibilities and effectively creating a technology accelerator platform. Eventually, more entrepreneurs will hopefully flow into UBS’ private bank at the end of it and, of course, there are many investment opportunities there for existing clients.
S1: sustainable investments
UBS has a 100% fully diversified SI portfolio, which crossed a major milestone in APAC when it reached US$2.8 billion at the end of 2020. Its risen 32% in the past 12 months and reached US$3.5bn by the end of Q1 this year. In September 2020, GWM announced it has made sustainable investments the preferred solution for private clients globally, proving the bank’s commitment to the area and expectation of returns in it.
Additionally, UBS has directed US$6.9bn of client assets into impact investments related to the UN’s Sustainable Development Goals (SDGs) since 2017. In many ways this can be seen as a precursor to the Environmental, Social and Governance (ESG) agenda that is particularly popular at the moment as carbon net zero targets proliferate globally. SI is a key element in ESG as well, alongside the social justice aspects of this hot topic.
Last year the bank’s Core Sustainable Investments (Core SI) rose by 62% to USD$793bn overall to become 19% of all client invested assets. Core SI products involve a strict and diligent asset selection process across key SI strategies, maintains the bank. Invested assets classified as impact investing or sustainability focused – applying only the most rigid sustainability criteria – increased 154% in comparison to 2019, to stand at US$141bn. UBS’ strategic focus on sustainable asset classes and the increased demand for SI is clear.