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UBS Group (UBS) Forms GWM Solutions to Transform Wealth Unit
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UBS Group AG (UBS - Free Report) is re-aligning its wealth-management business, the bank's flagship business, to improve its offerings to ultra-rich clients. This was disclosed in an internal memo by Rob Karofsky and Iqbal Khan, the unit’s new co-leaders according to Reuters.
The bank has announced that starting from Jul 1, 2024, it will establish a new division known as GWM Solutions to consolidate different products for clients. The new unit will offer services, including investment management, lending, family and institutional wealth management and alternative investments. Its operations will be run by Yves-Alain Sommerhalder — a previous Credit Suisse executive.
This new unit will have alternative products from both its wealth and asset management businesses, including real estate and private market investments.
In a separate memo, the bank stated that it was establishing a unit called Unified Global Alternatives, which would bring some of its alternative asset-management products closer to its wealth business.
Citing a Reuters report from May, UBS planned to incorporate parts of its asset-management unit into its broader wealth-management division to cut costs. Wealth management is UBS Group’s flagship business, which accounts for more than 50% of the Swiss bank's total revenues.
The bank has been actively making efforts to restructure its business strategies. As part of this restructuring, it is likely to wind down its non-core and legacy portfolio, releasing more than $6 billion of capital by the end of 2026. Through these efforts, the company aims to achieve gross cost reductions of around $13 billion by the end of 2026 compared with 2022 levels.
Shares of UBS have lost 4.7% on the NYSE over the past six months against the industry’s growth of 0.8%.
Other Banks Restructuring Wealth Management Business
In June 2024, AssetMark Financial Holdings Inc.’s (AMK - Free Report) wholly-owned subsidiary, AssetMark, entered into a strategic coalition with Morningstar Wealth, a division of Morningstar Inc. The transaction, approved by the board of directors of both companies, is expected to be closed in the second half of 2024, subject to regulatory approvals.
AMK’s AssetMark will acquire roughly $12 billion in assets from Morningstar Wealth Turnkey Asset Management Platform ("TAMP") as part of the alliance. AssetMark’s platform, which offers top-tier service, advisor technology, business consulting and a diligently selected group of investment strategists, will be accessible to financial advisors and clients on Morningstar Wealth’s TAMP.
In the same month, Citizens Financial Group, Inc. (CFG - Free Report) unveiled a few developments aimed at accelerating the growth of its Wealth Management business to attract new high-net-worth clients.
CFG’s long-term strategy involves growth in wealth management offerings, improvement of capabilities in the high-net-worth segment, and expansion into key markets.
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UBS Group (UBS) Forms GWM Solutions to Transform Wealth Unit
UBS Group AG (UBS - Free Report) is re-aligning its wealth-management business, the bank's flagship business, to improve its offerings to ultra-rich clients. This was disclosed in an internal memo by Rob Karofsky and Iqbal Khan, the unit’s new co-leaders according to Reuters.
The bank has announced that starting from Jul 1, 2024, it will establish a new division known as GWM Solutions to consolidate different products for clients. The new unit will offer services, including investment management, lending, family and institutional wealth management and alternative investments. Its operations will be run by Yves-Alain Sommerhalder — a previous Credit Suisse executive.
This new unit will have alternative products from both its wealth and asset management businesses, including real estate and private market investments.
In a separate memo, the bank stated that it was establishing a unit called Unified Global Alternatives, which would bring some of its alternative asset-management products closer to its wealth business.
Citing a Reuters report from May, UBS planned to incorporate parts of its asset-management unit into its broader wealth-management division to cut costs. Wealth management is UBS Group’s flagship business, which accounts for more than 50% of the Swiss bank's total revenues.
The bank has been actively making efforts to restructure its business strategies. As part of this restructuring, it is likely to wind down its non-core and legacy portfolio, releasing more than $6 billion of capital by the end of 2026. Through these efforts, the company aims to achieve gross cost reductions of around $13 billion by the end of 2026 compared with 2022 levels.
Shares of UBS have lost 4.7% on the NYSE over the past six months against the industry’s growth of 0.8%.
Image Source: Zacks Investment Research
Currently, UBS Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Banks Restructuring Wealth Management Business
In June 2024, AssetMark Financial Holdings Inc.’s (AMK - Free Report) wholly-owned subsidiary, AssetMark, entered into a strategic coalition with Morningstar Wealth, a division of Morningstar Inc. The transaction, approved by the board of directors of both companies, is expected to be closed in the second half of 2024, subject to regulatory approvals.
AMK’s AssetMark will acquire roughly $12 billion in assets from Morningstar Wealth Turnkey Asset Management Platform ("TAMP") as part of the alliance. AssetMark’s platform, which offers top-tier service, advisor technology, business consulting and a diligently selected group of investment strategists, will be accessible to financial advisors and clients on Morningstar Wealth’s TAMP.
In the same month, Citizens Financial Group, Inc. (CFG - Free Report) unveiled a few developments aimed at accelerating the growth of its Wealth Management business to attract new high-net-worth clients.
CFG’s long-term strategy involves growth in wealth management offerings, improvement of capabilities in the high-net-worth segment, and expansion into key markets.