UBS RIA BREADCRUMBS: Where Is The Swiss Bank Headed As It Wades Into Unfamiliar Territory?

UBS has planned to launch an ‘independent advisory’ channel for more than a year. Much like they’ve done time and again versus rivals Morgan Stanley and Merrill Lynch, UBS has stayed ahead of the curve when it comes to moving ‘where the puck is going to be, not where it is’ (as Wayne Gretzky once famously said). 

To prove the ‘ahead of the curve’ claim remember that UBS was the first to claim fresh capital before the financial crisis hit in earnest. Doing so fully six months before Merrill executed a shotgun sell to Bank of America. Other moves made by the Swiss wealth management brand have generally stayed ahead of rivals.  

But what of a move to add an RIA or independent channel?  

Via AdvisorHub a couple months ago: 

“The decision of a conventional retail brokerage firm to expand from its core business of selling investment products through a captive brokerage force signifies the attractiveness of the independent advisory model to many advisers with large practices and, perhaps, practicality.”

“What they are really doing is addressing a threat to their core channel of brokerage and product distribution by recognizing that there’s this whole growing segment,” said Mark Tibergien, chief executive of advisor solutions at BNY Mellon/Pershing, who said he was not familiar with UBS’s plans.”

Take a glance at the recruiting winners and losers so far this year and the tilt towards independents and regionals has turned into an absolute route. The largest teams at wire houses are taking the straightest route to firms like Stifel, Dynasty, Raymond James and other firms like them. Large scale ‘wire to wire’ moves are like spotting Bigfoot in the wild. Rare to say the least. 

UBS aims to beat their larger rivals to the punch and provide a familiar logo to an ever popular business model – wealth management entrepreneurship. It simply is no longer a drum beat, but an anthem. 

Per conversations we’ve had with UBS sources and industry leaders the RIA like structure should be appealing internally. Teams considering moving completely away from the firm will now have an option to stay in house and avoid legal battles as well as a new address altogether. 

Another element is in play – and that is UBS’ exit from the broker protocol. This further makes the case for tenured advisors itching for independence to do so within the family as opposed to abandoning ship altogether. 

The real test of the new business model at UBS will be whether or not they are able to lure advisors to the platform from outside the firm. Can they compete with Dynasty, HighTower, Ameriprise, and others. All who have been doing it exponentially longer than UBS? 

Time, and footprints, will tell the tale.

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