Asian expansion and technological innovation central to UBS’ plans for the future

The president of the world’s largest private banking franchise, Jürg Zeltner of UBS Wealth Management, has laid down a marker to the rest of the fast transforming industry.

Central to his vision is the shifting landscape of technological innovation, coupled with expansion in Asian markets.

This renewed affirmation of resources available for wealth management will certainly leave smaller competitors feeling uneasy.

“There are many new entrants, but they do not have the resources, infrastructure or track record,” says Mr Zeltner, whose franchise runs more than $2tn (€1.83tn) in client assets. His business has spent “billions already”, investing in processing, technology and bringing a new advice strategy to customers.

“Wealth management has a totally different infrastructure to when I grew up in banking” during the 1980s, says Mr Zeltner, who has led the UBS wealth operation over a number of hurdles, including explaining the bank’s landmark settlement with US authorities to clients and Swiss peers, and steering the bank on an onshore course, away from servicing questionable clients attracted by secrecy and low tax regimes.

The role that technology will play in this new reality is not to be underestimated, he says. Large private banking groups need to learn from the high-tech disruptors, who are here to stay, particularly with their ability to analyse and predict investors’ behavioural trends.

But the human touch is vital for private banking to continue to flourish, says Mr Zeltner. “Digital and tech will disrupt, but human intervention will not go away. It is hard to build trust on digital only.”

The role of advice has become even more central to wealth management, with Mr Zeltner able to dismiss claims from rival institutions that investment has become commoditised.

“The need for advice from our clients has never been greater,” he says. “In the last couple of years – after the biggest financial crisis, followed by a severe economic crisis – every asset has been correlated and the theory that the emerging world and established markets are decoupling has been shown to be nonsense.”

In the current environment, he says, in particular referring to the volatile situation in Asian markets, banks must be able to “look through the noise and provide information on long-term trends and form a long-term asset allocation”.

Far from turning its back on China, this is a time for UBS to become even more engaged in core Asia Pacific markets, he claims. “There is still disruption through technology. China has lifted tens of millions out of poverty, we need to look at these things and give clients the opportunity to benefit from them.”

UBS will not be radically changing the core of its asset allocation, with strong weightings to the Apac region. “We need to look at long-term trends, things which will be disruptive,” he says. “China is here to stay as the stimulus for growth and prosperity.”

PWM will be running an in-depth interview with Jürg Zeltner in the upcoming February/March issue of the magazine