UBS: King of Asset Management

Last year, UBS maintained its top position as the best institution in wealth management after experiencing a 15.4 percent asset growth. The Swiss owned bank gained a whopping $ 1.96 trillion during this year ranking it the world’s best wealth management firm. Research carried out by Scorpio Partnership, indicated that favorable market conditions in the industry led to increased growth across the platform. This saw 25 top ranked wealth management firms experience an average of 11 percent growth in assets.

The increased success of UBS was attributed to clientele base increase that contributed to about £9.2bn, and accounted for a quarter of last year’s earnings. When asked to comment on the growth, the managing partner Mr. Sebastian Dovey indicated that the global expansion of the bank played a major role in its success. He further pointed out that majority of banks located in the Asia Pacific region recognized the fact that UBS controlled more assets than the local banks.

After struggling with the fixed-income trading platform that was not yielding good results, UBS bank decided to concentrate on the wealth management docket two years ago. This move led to its increased growth in assets. The second in line of growth was Bank of America with a 12.5 percent gain in assets; this Bank had earlier transferred its global wealth management business to Julius Baer, a Swiss owned private bank and saw it grow its assets to $ 1.9trillion. Mr. Dovey pointed out that favorable markets were the common denominator that led to the growth across the industry.

Out of the top 20 wealth management companies, only one bank experienced a loss of its assets. The UK bank HSBC manage $ 382bn, which is a 4 percent drop from its previous earnings. This decrease in profits was brought about by HSBC’s decision to drop its auxiliary markets with the aim of fighting money laundering and tax evasions. The move has seen HSBC drop its presence in Luxembourg, Ireland, and Monaco. It also transferred $ 12.5bn worth of assets to LGT group. HSBC was optimistic that they might be headed for growth given the huge restructuring processes. According to Mr. Dovey, there is still room for growth in the industry since 60 percent of the markets remain untapped. He indicated that the top 25 wealth management firms had experienced an average of 2 percent increase in profits despite the heightened cost to income ratio. He blamed new policies and highly paid bankers as contributors to heavy costs.

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