UBS has confirmed the closure of its robo-advice platform, Recommendation Benefit, marking a major shift in technique as main Wall Avenue companies proceed to reduce their digital wealth administration choices.
The robo-adviser was initially launched over seven years in the past as a part of UBS’s broader effort to draw rising high-potential purchasers within the wealth accumulation part, an more and more aggressive phase that rival wirehouses have additionally been concentrating on.
In response to Barron’s, Morgan Stanley’s 2020 acquisition of E-Commerce Monetary introduced in over 16 million potential consumer leads, offering alternatives to transform them into full-service advisory relationships.
Recommendation Benefit was initially developed underneath the management of Wealthy Steinmeier, who on the time served as Head of Digital Technique and Platforms at UBS Wealth Administration USA.
Steinmeier now serves as Chief Government of unbiased broker-dealer LPL Monetary.
Following the launch of Recommendation Benefit, UBS sought to deepen its footprint within the robo-advice house with the proposed acquisition of robo-advice large Wealthfront for US$1.4 billion.
Nevertheless, the deal was mutually terminated in late 2022, with UBS as an alternative buying a US$69.7 million convertible word in Wealthfront.
UBS has beforehand examined robo-advice fashions in different markets, together with its UK-based SmartWealth service, which debuted as a pilot programme in 2017.
The rights to that platform had been offered a yr later to San Francisco-based wealth expertise agency SigFig Wealth Administration.
SigFig has performed a central function in powering Recommendation Benefit, offering core expertise for portfolio administration, together with automated rebalancing and tax-loss harvesting options.
UBS has been a strategic investor in SigFig since 2016.
Though UBS declined to reveal the present property underneath administration for Recommendation Benefit, business publication AdvisorHub reported in early 2022 that the platform had surpassed US$1 billion in property.
The choice to shutter Recommendation Benefit aligns with broader business traits, as a number of main monetary establishments have stepped away from the robo-advice market because of profitability challenges.
JPMorgan Chase closed its absolutely digital robo service, J.P. Morgan Automated Investing, final yr.
Goldman Sachs additionally wound down Marcus Make investments, offloading its buyer accounts to Betterment.
Equally, BlackRock discontinued its robo-advice platform, FutureAdvisor, in 2023, transferring an estimated US$1.75 billion ebook of enterprise to Ritholtz Wealth Administration.
Extra just lately, women-focused wealth agency Ellevest divested its robo-advice enterprise to Betterment, shifting its focus to non-public wealth administration providers.
The closure of Recommendation Benefit underscores the mounting difficulties confronted by robo-advice platforms in attaining scale and profitability inside an more and more aggressive and evolving wealth administration panorama.
Featured picture credit score: UBS