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Switzerland's UBS Targets High Net Worth Clients

Ulrika Lomas, Tax-News.com, Brussels

26 February 2001

The Swiss banking group, UBS, plans to launch a new wealth management business focussing on wealthy European clients, it has been revealed. The new venture, which will run alongside the Swiss bank's more traditional private banking operation, will combine both online services and the 17 offices UBS now has in Europe, and will initially focus on Germany, the United Kingdom, France, Italy and Spain, which together account for approximately 80% of Europe's investible wealth.

The service will, however, only be available to individuals with more than 500,000 euros (or £313,000) of liquid assets. Luqman Arnold, UBS's chief executive explained that the group had little interest in following the route taken by many of its competitors, and would not be targeting a 'mass affluent' audience, as that market was already 'incredibly overcrowded'. Mr Arnold also felt that UBS had no particular competitive advantage in that area: 'If you are an insurance company or a retail bank, it might make sense' he said, 'but not for UBS.'

This new European strategy leans heavily on the expertise of Paine Webber, the US brokerage acquired for $12.4 billion by UBS last year. The group has stressed, however, that the merger 'won't affect client relationships', perhaps mindful of the problems experienced in 1998 when the Union Bank of Switzerland merged with the Swiss Bank Corp to form UBS, causing significant numbers of wealthy clients to jump ship.

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