UBS’s wealth management arm might be the fourth biggest in the UK, but it still has only 4% of the market share, which is ‘well below’ what head Eva Lindholm considers the bank can achieve.
The UK and Jersey wealth business which Lindholm leads has £45.1 billion in assets under management across 8,600 clients.
‘When I moved from my global ultra-high net worth role, where I saw a segment of clients, I hadn’t stopped to appreciate how large the UK market really is. It’s one of UBS’s top markets globally.
‘When I looked at the statistics of our positioning, there were two bits of information coming through that were directly in contrast to each other.
‘We are the fourth largest wealth manager in the UK, and the top international bank, but we only have 4% market share. How can you be the fourth largest with that?’
Lindholm says that in a place that is considered to be a core market, UBS aims to have at least 6% market share.
‘By definition, where we are today, we are well below what UBS itself would expect a franchise of this calibre to be,’ she says.
‘It is well below where we think we could be if we just win and keep winning our natural share of the market. When I look at the direction of travel, and obviously you can’t assign a precise number of years to these things, but my aim is to double that market share. That should be achievable based on who we are and the potential of the UK market.’
Her ambition to double UBS’ market share comes on the heels of something Lindholm believes is going to be ‘game-changing’ for the business, referring to the Swiss bank’s decision at the start of the year to merge its American and international wealth businesses into one global division.
‘It’s very important not to underestimate the combination of the US and non-US business. Even though it’s not an M&A deal, this is putting two really big chunks together, taking what was a lack of connectivity out of the picture and encouraging these two important parts of the client coverage universe to work together,’ she adds.
It has also been a period of change for UBS at the top, with Lindholm taking over from incumbent Jamie Broderick almost a year ago in October. The reorganisation of its global wealth business was revealed just a few months later, accompanied by the announcement of Martin Blessing and Tom Naratil as co-presidents.
Since then, the bank has revealed stellar figures for its global wealth management division, recording a CHF 2.2 billion (£1.7 billion) pre-tax profit over the first half of the year, a 19% rise year-on-year. Over the same period, operating income was up to CHF 8.4 billion from CHF 7.9 billion.
The main question for Lindholm following the merger is: ‘How do we get better and better at bringing together the capabilities we have across different divisions across the globe?’
It is the goal of the bank, she says, to operate across regional boundaries with speed and make sure it is compliant in each one of the countries ‘across whose borders we do business’.
‘It is so people can look at the client situation and figure out how to solve a client problem and not worry about the organisational structures that have up until now been more dominant around how they do the business. I think that is big news for us. Hopefully London benefits too.’
For London to benefit it makes sense to have such a globally-minded woman lead the UK hub. Lindholm originally hails from Finland, joking that she is ‘one of the privileged minority of Swedish-speaking Finns’. She completed her undergraduate and graduate degrees in the US and then started working for JP Morgan.
During her time there, a period of over 25 years, she wore a number of different hats, variously covering EMEA, overseeing the Russian and Ukrainian banks, working for the private bank in New York, covering Latin America and Canada. She even spent a year in Geneva. Given her first role at JP Morgan was at the private bank however, she considers joining UBS’s wealth management operation over five years ago, a bit of a homecoming.
Lindholm, now settled into her new role, argues that the growth of the business will come from the emergence of the next generation and the transfer of wealth, as well as the creation of wealth by women. And in her opinion, UBS needs to respond to these segments and address their needs.
‘The next generations have quite a strong moral compass, thinking about being mindful of the impact you have on the planet, being mindful about the dignity of other human beings and human rights. That has enabled us to respond in very concrete ways, how we’re evolving our service capabilities.
‘The other mega trend is the creation of wealth by women. They are playing quite an outsized decision-making role in shaping how the world gets passed on to next generations. Their interest seems to have a dimension that goes well beyond performance.’
To address these needs UBS has upped its focus on impact and sustainable investing, and in its latest move has partnered with the World Bank to launch a sustainable fixed income product. She also highlights UBS’s relationships with intermediaries in the regions as a good source of growth.
The bank currently has five regional offices, with no immediate plans for others, focusing on attracting entrepreneurs in particular. This is because of the mid-market M&A activity that has been happening in the regions, with clients becoming wealthy for the first time and seeking out advice for complicated issues such as large liquidity events.
‘We continue to focus on clients with multi-dimensional needs. If someone wants a standardised commoditised product that you can get from any bank, we are not the best place to come to.
'But if you have a multi-dimensional issue that needs solving, or you need a booking centre diversification in order to manage the geographical risks of their portfolios, we have become quite good at being able to solve global problems,’ she says.
‘And for us obviously combining what used to be wealth management Americas, run separately from wealth management, into one global business takes that a step further and for the UK is quite an important development because London is such an centre for global connectivity.’
As the bank looks to increase its market share, it also needs people on the front line to work with clients. For Lindholm, it is important that they come from a multitude of backgrounds.
She says that because the world is changing so quickly and ‘so profoundly’ that she wants to find more lateral hires from other industries.
‘If we can’t be ahead of the curve on disruption then we have to have enough agile thinkers from other disciplines who are able to contribute to what we do,’ she points out.
While these individuals can be more difficult to find, because of the technical and regulatory qualifications that are needed to now work in wealth management, she is adamant that the industry needs to ‘figure out ways to bring more diverse backgrounds and experiences’ in to the fold. This will in turn bring in diversity of thought and communication styles.
‘That’s where you keep your human capital at its sharpest and that’s the hardest thing to do.’
It is difficult, of course, to finish an interview without asking, what about Brexit?
Lindholm does not seem that concerned at the moment. However, she highlights some potentially significant issues in five to 10 years’ time. She says that depending on the type of Brexit, there will be an impact on job creation and the depth of the talent in the market.
‘One of the reasons we get the best and brightest is because London is a desirable place to work.
'An overseas person’s view is that education in the UK is world class, but if those factors were to fade out over time that will obviously affect the prospects,’ she says.
‘I’m optimistic and hopeful that’s not the case. In fact with the pound where it is, we’ve seen some of our overseas clients come and purchase real estate and have seen no let-up in interest of our clients wanting to educate their children here.’
She adds: ‘I don’t think any of the things I fear over the long term are evident, but those are the questions we need to ask.’