Mark Goddard, Head of UK High Net Worth at UBS Wealth Management, explains how the world’s leading global wealth manager supports the development of tailored financial and investment plans for their UK-based clients.
What, in brief, is UBS’s history and how does it stand now in terms of its UK presence and client base?
Mark: “Our story began with the founding of the bank in 1862, and we have since grown to become one of the world’s leading financial firms across the globe. We are consistently rated as an industry leader, and are among the best capitalised and financially strong banks worldwide.
“We have a wealth management presence in 90+ countries around the world and have had an onshore presence in the UK since 1999. We are headquartered in London but pride ourselves in being one of the few truly global banks to have five offices across the UK regions serving a broad cross-section of clients. We operate at a local level but provide clients with access to the global reach of the wider firm.”
Who is the typical client of UBS in the UK? What is their stage of life and what are they trying to achieve with their wealth?
Mark: “We partner with a broad cross-section of clients in the UK. The majority have acquired their wealth through entrepreneurship, working as a corporate executive, or employment in the finance sector, though we also work with a wide range of individuals from the worlds of sports, media and entertainment.
“We look after and advise individuals at all stages of their life and business cycle, from building and growing a business, to accumulating financial resources through earned income, and inheriting or gifting wealth. The majority of our clients are looking to develop a long-term financial plan that utilises the breadth of UBS’s capabilities, including wealth structuring, portfolio management, thematic and sustainable investing, and lending.”
How would you describe UBS’s investment ethos and risk management approach? Does the firm have expertise in any particular areas of investment?
Mark: “Investing with UBS starts with our globally integrated investment framework. Our core strategies are global, diversified, and long-term oriented, and are complemented with a robust monthly investment process, designed to ensure we also seize shorter-term market opportunities.
“Successful investing requires a clear understanding of the basis on which portfolios are constructed and managed. At the heart of our investment philosophy is the conviction that portfolios should be:
- Personal: we develop a range of portfolios to align with the goals and preferences of a broad variety of investors.
- Long term: we believe portfolios with long-term objectives are better placed to gain from value creation over time.
- Active: markets present short and medium-term opportunities that we seek to identify, and we also consider it important to adjust portfolios as personal circumstances change.
- Global: we believe globally diversified portfolios deliver superior risk-adjusted rates of return over time.
- Diversified: diversification has been described as "the last free lunch in finance," and this principle is reflected in our portfolio strategies.
“As well as being an exceptionally strong core investment manager, some of the areas where UBS has differentiated expertise include sustainable investing, private markets, and foreign exchange.”
How does UBS go about devising investment strategies and building portfolios which suit each individual client’s risk-profile and financial goals?
Mark: “Our starting point with all clients is to develop a deep understanding of their personal goals and objectives, where they are in their financial lifecycle, along with their experiences of investing and managing wealth to-date. We will review income and expenditure, the current and future balance sheet and relevant financial planning considerations.
“We then explore key aspects of risk to establish a UBS risk profile:
- How much risk can you afford to take without negatively impacting your lifestyle
- How much risk are you comfortable taking
- How much risk do you need to take to achieve your objectives
“Combining goals and objectives with the feedback from these questions will ultimately drive the financial and investment plan that we construct for each client and family.”
How would you describe UBS’s approach to servicing clients? Do you encourage one-on-one relationships or do you take more of a team approach? How do you communicate with clients?
Mark: “The client adviser is the main point of contact and manages the client relationship on a day-today basis. They develop a deep understanding of a client’s goals and objectives and use the global capabilities and resources of the bank to support the construction of a targeted, client-led financial strategy.
“Our client adviser work in small teams with administrative support to ensure our clients always have someone available to speak to/email. Within the wider UK team, they will also bring to bear relevant experts and specialists to support across a variety of topics including financial and wealth planning, investment portfolio construction and lending.
We communicate with clients through their preferred channels including regular face-to-face meetings, email, phone and through our online banking platform.
How does UBS help clients engage more effectively with the management of their wealth?
Mark: “One of the most important roles we play with clients is in working through the ultimate purpose of their wealth. We have clients with a wide variety of backgrounds, some of whom have managed their financial affairs extensively, but many who are in the position of taking on this task for the first time following a liquidity event i.e. sale of a business, an inheritance, a divorce etc.
“As a result, we place heavy emphasis on helping clients identify and prioritise in the short, medium and longer term, those things that are most likely to have a bearing on their financial situations. This in turn allows us to construct a more personalised financial and investment plan.
“We run regular family workshops as well as hosting a ‘Next Generation’ event for our clients’ children. These sessions typically cover topics including an introduction to financial markets, building financial confidence, sustainable investing and planning for the future.”
Many of our clients are looking for financial planning as well as investment advice. How do you help in this area?
“At UBS, financial planning is at the heart of our client relationships. We follow a purpose driven approach to wealth management utilising our ‘3L’ framework:
- 'Liquidity' is the resources clients require to maintain their lifestyle. Assets are allocated to match expenditures in order to provide steady cash flows for the next 2 to 5 years.
- 'Longevity' reflects the assets required to help improve clients' lifestyles. This strategy is designed and sized to include all of the assets and resources the family plans to utilise for the remainder of their lifetimes, which provides a clear picture of what future spending objectives will cost.
- 'Legacy' is what will remain beyond our clients' lifetimes. This strategy clarifies how much a family can do to improve the lives of others, either now or in the future. It includes assets that are in excess of what the family members need to meet their own lifetime objectives, and generally is the focus of estate planning and philanthropic goals.
We have a dedicated team of financial and wealth planners who have extensive experience supporting clients with both complex and more straightforward circumstances. They work alongside the client adviser who is ultimately responsible for the client relationship
Finally, what else is distinctive about UBS?
Mark: “There are three key areas where I believe UBS offers true distinction from our UK peers:
- It’s our core business: wealth management is the core of UBS’s business and accounts for the lion’s share of the Bank’s revenue. We are not an add-on to a large commercial, investment or retail bank, so our wealth management clients are genuinely at the heart of the Group’s long-term strategy.
- We are global: financial theory dictates that globally diversified portfolios deliver superior risk-adjusted returns over time than more narrowly focused portfolios. An excessive focus on one national market increases exposure to adverse financial, economic, and political events occurring there. In a fast-moving and increasingly globalised economy, we provide access to truly global investment expertise, with our Chief Investment Office researchers and analysts physically on the ground in all major regions and markets around the world.
- We provide differentiated access: due to the global buying power of UBS, we are able to access best in class investment management for our clients across all asset classes and notably in the alternatives space i.e. private markets and hedge funds.
