UBS Group is returning to wealth management in Australia after it exited almost a decade ago, tapping the Credit Suisse franchise it bought to make a renewed charge.
The firm is targeting the rising number of rich women and family offices in the country, according to its local wealth chief. For a nation of less than 30 million people, it’s become a key market for UBS. It plans to grow the more than US$30 billion ($40.49 billion) in high-net-worth money it manages there as part of the firm’s wider Asia Pacific expansion goals.
UBS has vaulted back to the upper tier of Australian wealth managers after the merger of the two Swiss banks provided a pathway back into a market it had exited in 2015. It’s now up against foreign players such as Morgan Stanley as well as domestic-focused firms like Shaw and Partners, vying for business in one of the world’s fastest growing wealth markets.
“UBS should never have left wealth management, basically,” Michael Marr, UBS’s head of global wealth management for Australia and New Zealand and a nearly 15-year veteran of Credit Suisse, said in an interview in Sydney. UBS’s purchase of its smaller Swiss rival gave it a business that had grown “very very quickly”, he added.
High-net-worth wealth in Australia grew 7.9% last year, second only to India among Asia-Pacific countries and above the global average of 4.7%, according to a Capgemini report.
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To be sure, recovering the lost market share won’t be straightforward in a highly competitive industry. Morgan Stanley’s website says it’s the largest international wealth manager in Australia, with more than A$41 billion ($35.79 billion) in client assets, and more than 100 financial advisers.
Newly-installed UBS global co-head of wealth management, Iqbal Khan, has reflected on the importance of the Asia Pacific. His own relocation from Zurich to Hong Kong “is the first time UBS has actually had a global divisional lead in Asia, which marks a massive transition for UBS”, he said at a conference in Sydney this month.
“We’ve been very strong at UBS in markets and banking but we did not have wealth management and actually being able to add wealth management to it gives us a one-stop shop for our clients here in Australia,” he said.
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With the Credit Suisse merger, the firm’s investment banking dealflow is already being offered through the wealth arm’s direct investment group, which arranges placements into private deal opportunities. It was recently used to give some Australian clients exposure to Elon Musk’s start-up xAI, Marr said.
Marr added that moving to UBS has also helped with some family offices because the wealth team puts them directly in touch with its equities execution floor, rather than using the division as a broker.
Among the fastest newcomers to the high-net-worth category are women and not-for-profits, according to Marr. Both have gone from “niche a couple of years ago and now are a huge opportunity”, he said.
The firm has a rough threshold in the Asia Pacific of about US$5 million as the minimum qualifier to be considered a high-net-worth individual.
With the number of female millionaires growing at 6% annually, nearly double that of men, they are becoming a top priority for the Swiss bank, Marr said. To meet the demand, the bank’s assembled a strong gender mix across its 28 client advisers in Australia, he said.
Women are getting wealthier in a number of ways, including entering lucrative STEM careers, taking over family businesses or through divorce, he said.
“Everything is aligned for material growth in women’s wealth,” Marr said.
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Meanwhile, requests for tenders to the bank coming from the not-for-profit sector and endowments grew fivefold over the last five years and the average investment has grown from between A$10 million to A$20 million to above A$100 million, Marr said.
Much of the interest has been driven by a thirst to diversify out of real estate and into assets such as private equity and sustainable investments.
“They want to give out a bit more and want a slightly more liquid corpus to manage,” Marr said about the non-profit sector. “It varies but the level of sophistication now, the requests and follow-on questions we get, you really need to be on your game to cover that sector.”
Chart: Bloomberg
