UBS’s Robo Push? It’s Really for the Masses
If you’re a broker at UBS Wealth Management Americas, there’s no need to panic about internal competition from the the company announced with such fanfare on Monday.
The SigFig automated investment platform that UBS said will “complement the expertise” of its 7,000 brokers and “enhance their clients’ digital experience” will actually be aimed at low-level accounts that advisors are told to shunt to the firm’s Wealth Advice Center for “emerging affluent” clients.
“That’s the segment where they can fully control the advisor and deploy new capabilities very quickly,” SigFig Chief Executive Mike Sha said in a phone interview on Tuesday. “The rest of the advisors are quasi-independent and are harder to train and educate.”
A UBS spokesman and an official who helps runs the Advice Center did not respond to requests for comment.
To be sure, UBS may try to integrate the robo offering into the broad wealth-management quiver used by its advisors, positioning it as a tool to nab upwardly mobile prospects and less affluent relatives of their typical clients. (Paul Hatch, a group managing director in charge of UBS Wealth America’s advisory platforms, has said that the company generally wants to get )
SigFig was never aimed at the Upper High Net Worth investor, Sha said, noting that he pitches the automated investment technology as a tool for reaching a broad base of individual investor through a scalable, technologically advanced platform.
UBS Americas spent 18 months and evaluated over 100 potential robo solutions, Sha was told by UBS executives. He also gave personal presentations to UBS AG CEO Sergio Ermotti, former Wealth Americas president Bob McCann, current president Tom Naratil and wealth management Americas’ client strategy officer Paula Polito—whose realm includes the Advice Center.
The primary appeal of SigFig to a company as big and complex as UBS is its reliability from an operational, security and compliance perspective, Sha said.
Unlike some better-known robo rivals such as Wealthfront and Betterment, which mostly market directly to individuals, SigFig seeks alliances with brokerage firms. Its technology includes an aggregation component (clients are asked to delineate the range of places they hold their assets), something that UBS could promote to its traditional advisors down the road, he said. (UBS’s news release about the SigFig alliance flicks at its ability to help advisors “efficiently provide advice on assets held at UBS and other institutions.”)
UBS has made a small investment in SIgFig, whose principal backers include Bain Capital Ventures, Union Square Venture and other venture capital firms, but has no exclusivity rights nor right of first refusal on a potential acquisition, Sha said.
He declined to discuss if SigFig may be talking to other big firms, including Wells Fargo Advisors and Morgan Stanley, both of which have said they are exploring robo-type services. But he noted that alliances can be made even with firms that develop their own core robo platforms, saying technology today permits “inter-operability” of components.