Previously, the lowest private banking segment at UBS was for customers with between $500,000 and $2 million in assets, and clients with over $2 million were automatically placed in a different bracket and given a personal advisor. Clients in the expanded bottom bracket will not automatically get an advisor but will have access to one if they want it, per a person familiar with the matter cited by Bloomberg.
UBS is not the only high finance bank shifting its services for clients outside the wealthiest brackets. UBS’ decision comes after Philipp Wehle, Credit Suisse’s new head of international wealth management, started asking relationship managers to consider moving clients with assets of around 20 million francs ($20 million) to a new private banking division that will use more digital money management tools, people with knowledge of the matter said, per Bloomberg.
In a similar vein, Goldman Sachs has been moving slowly into retail banking through initiatives like its Marcus offering and its hand in the creation of Apple Card.
Growing its lower bracket and deploying more tech to serve those clients could help UBS reduce the cost of servicing affluent customers. By automating tools for its lowest bracket of wealthy customers, UBS can reduce the amount of time human advisors must invest in these clients, allowing the bank to dedicate these employees to higher net worth individuals — who may have a stronger desire for white-glove, in-person service — and limiting the cost of serving the lower net worth ones by automating some functions an employee would otherwise have to handle.
And importantly, supplanting human services with more tech is unlikely to be a turn-off for clients in the bank’s lowest bracket: Two internal studies in the last few months indicated that clients with assets between $2 million and $5 million behave more like clients in the lower bracket than high net worth clients — they use more online services than client advisors and don’t use as many sophisticated products and service offerings as those in the higher asset bracket.
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