UBS Group AG Realigns Wealth-Management Business to Focus on Ultra-Rich Clients

UBS Group AG is making significant changes to its wealth-management business in order to better serve its ultra-rich clients. The bank’s new co-leaders, Rob Karofsky and Iqbal Khan, have announced the establishment of a new division called GWM Solutions, which will consolidate various products for clients starting from Jul 1, 2024.

This new unit will offer a range of services including investment management, lending, family and institutional wealth management, and alternative investments. Yves-Alain Sommerhalder, a former Credit Suisse executive, will be in charge of running the operations of this division.

Additionally, UBS will be creating a unit called Unified Global Alternatives to bring some of its alternative asset-management products closer to its wealth business. These changes come as part of the bank’s efforts to restructure its business strategies and cut costs.

In a bid to streamline its operations, UBS plans to wind down its non-core and legacy portfolio, releasing over $6 billion of capital by the end of 2026. The company aims to achieve gross cost reductions of around $13 billion by the end of 2026 compared to 2022 levels.

Despite these changes, UBS’s shares have seen a decline of 4.7% on the NYSE over the past six months. The industry, on the other hand, has seen growth of 0.8% during the same period.

UBS Group AG is not the only bank restructuring its wealth management business. AssetMark Financial Holdings Inc. and Citizens Financial Group, Inc. have also made strategic moves to enhance their wealth management offerings and attract high-net-worth clients.

Overall, these changes in the banking industry reflect a broader trend of financial institutions adapting to meet the evolving needs of their clients and remain competitive in a rapidly changing market.