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Banking Briefing: UBS buys Wealthfront

  • This week: UBS buys Wealthfront, a digital US dollar may be on the way, and Tearsheet's Challengers Podcast is back
  • What a crazy month it's been in the world of banking -- and crazier still is that it's just the first month

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Banking Briefing: UBS buys Wealthfront

A few days ago, Swiss bank UBS announced it was acquiring automated wealth-management provider Wealthfront in an all-cash deal of $1.4 billion, making it the biggest robo-advisor acquisition in history.

Wealthfront will be operated as a wholly owned subsidiary of UBS, run within UBS Global Wealth Management Americas.

The acquisition comes following UBS’s statement in October that as part of its 2025 vision, it wanted to create a digitally scalable advice model that would target affluent clients in the Americas with up to $2 million to invest. That same month, UBS had its most profitable quarter for wealth management, reaching $1.5 billion of pre-tax profits – over 40% more than last year.

The UBS perspective

Wealthfront has over 470,000 clients, $27 billion in assets under management, and primarily serves wealthy Gen Z and millennial investors. 

In a statement, both companies said the move will help “accelerate {UBS’s} growth ambitions in the US,” as well as give the firm a chance to reach more affluent investors. 

Last month, Ralph Hamers, CEO of the bank, mentioned the company was planning on rolling out a new digital wealth management service across the globe, starting with the US.

This new move marks a major step in UBS’s new tech-first approach to reach a greater consumer base, moving past just the ultra-rich clients with a hybrid delivery model.

“It is clear that we should cater for the entrepreneurs, but we should also cater for that segment of the market that may not be completely digitally engaged, but also doesn’t want to have 100 percent client-adviser coverage, but something in the middle,” Hamers told FT last month.

The Wealthfront perspective 

In its blog post announcing the acquisition, Wealthfront said there will be no changes whatsoever for users. Rather, they can expect the same services they have now, as well as more products and research from UBS.

The robo-advisory market continues to grow, predicted to reach a value of $41.1 billion by 2027, growing at a CAGR of 31.8%. 

As such, players in the industry are looking for new ways to one up the competition. 

While there aren’t a lot of details regarding exactly what Wealthfront gets from its sale to UBS, we do know the bank’s a heavyweight in the wealth management sector, and that could be a game-changer for little ol’ Wealthfront. At 470,000 clients, the robo-advisor may still be struggling to keep up with the Joneses. For reference – Betterment has 700,000 clients and $32 billion in assets under management. 

But with Wealthfront bought by UBS, and Personal Capital bought by Empower Financial, Betterment is now the only one among its major competitors that stands alone. 

Tearsheet’s Challengers Podcast is back

The Challengers Podcast is back – featuring Josh and Zack!

On the 16th episode of Tearsheet’s Challengers Podcast, J and Z go through the A-Z of what’s been happening in the crazy (and sometimes a little overblown) world of digital banking.


Here’s a little of what you can expect: 

  • N26’s failed expansion plans & crypto regrets
  • Starling’s slowly-but-surely slope to success 
  • Goldman’s Marcus-minted mark on retail banking
  • Acorns’ SPAC-tacular separation
  • Revolut’s revolutionary stock trading in the US (JK, it’s pretty standard…)
  • SoFi clearing its final hurdle into bankhood
  • The future of BNPL (and Josh and Zack’s split views on Splitit)

Of course, this is just the nutshell…if you want the real stuff, you’re gonna have to plug in your earphones (or earpods) and have a listen. ;) 

And in case you’re more in reading mode rather than listening mode, here are the resources mentioned on the show:

  • N26 got it wrong on global expansion and crypto, co-founder admits (FT)
  • Anne Boden confirms Starling’s global launch of banking-as-a-service (AltFi)
  • What’s next for Goldman’s Marcus banking strategy? (The Financial Brand)
  • Revolut launches stock trading in the US (TechCrunch)
  • How will BNPL evolve? (Tom Noyes)
  • Zopa deposits hit £1 billion (Finextra)
  • Investing app Acorns scraps $2.2 billion SPAC (Reuters)
  • SoFi clears final regulatory hurdle to become a bank (CNBC)

This week’s takeaway story: A digital US dollar is inevitable, says BoA

Bank of America has been making a lot of crypto-focused moves. It launched its crypto research in October, together with a report looking at the different uses of crypto, like NFTs, CBDCs, and tokens. It’s also been looking quite a bit at NFTs, and what they mean to the digital asset market. 

The bank believes the US could be moving towards developing its own digital currency. And this could happen sometime between 2025 and 2030, say crypto strategists Alkesh Shah and Andrew Moss in a recent report.

Without a US CBDC, other stablecoins, like Tether and USD Coins, are expected to get stronger.

About a week ago, The Federal Reserve published a paper discussing developing the future of its own digital currency. The Fed said the paper was just the first step and won’t proceed unless it gets support from the White House and Congress. It asked for a public comment by May 20. 

A digital US dollar could present a lot of benefits, from speeding up payments to improving financial access.

Still, the Fed says a bad digital dollar could lead to some pretty unpleasant side effects, like privacy concerns, and weaker banks.

What we’re reading

Global banks, including JPMorgan, Morgan Stanley and Goldman Sachs, are not happy with Beijing’s new overseas listing rules (FT)

Top EU banks will now be required to produce climate data showing whether or not they’re meeting climate goals (Reuters)

Cannabis banking popularity is growing among smaller banks, despite federal uncertainty (Bloomberg)

Banks are among the sectors expected to garner a lot of interest this year (Business Standard)

What the EU can teach North America and Asia about open banking (Forbes)

Reserve Bank of India penalizes eight banks for deficiencies in regulatory compliance (Economic Times)

Why banks need to start paying attention to ESG (BAI)

H&R Block’s plans for its new digital bank Spruce (PYMNTS)

UK challenger banks are bulking up credit building tools (PYMNTS)

Al Rajhi Bank, the biggest Islamic bank in the world, is zeroing in on cloud-based banking (AltFi)

Credit unions are feeling the heat to cut overdraft fees – can they do it? (American Banker)

JPMorgan Chase acquires 49% stake in Greek fintech Viva Wallets (Banking Dive)

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