UBS Terminates Digital Wealth Management Wealthfront $1.4 Billion Merger with $27 Billion AUM, Invests $69.7 Million Convertible Note
8th September 2022 | Hong Kong
UBS (Americas) & Wealthfront (Digital Wealth Management) have announced the mutual termination of their $1.4 billion merger with $27 billion AUM (merger announced in January 2022), with UBS instead investing $69.7 million via a convertible note into Wealthfront shares. UBS: “UBS remains committed to its growth plans in the US and will continue the build-out of its digital wealth management offering.” In January 2022, UBS had signed an agreement to buy United States automated wealth management provider Wealthfront in an all-cash transaction valued at $1.4 billion, acquiring $27 Billion AUM, 470,000 clients, and average of $57,000 holdings per client. Through this acquisition, UBS will accelerate its growth ambitions in the US, broaden the firm’s reach among affluent investors and expand its distribution and capabilities. Group Chief Executive Officer of UBS Ralph Hamers: “Adding Wealthfront’s capabilities and client base to our global investment ecosystem will significantly boost our ability to grow our business in the US … Wealthfront complements our core business in the US providing wealth management to high net worth and ultra high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors.”
“ UBS Mutually Terminates Digital Wealth Management Wealthfront $1.4 Billion Merger with $27 Billion AUM, Invests $69.7 Million Convertible Note “
Official Statement – January 2022
UBS agrees to acquire Wealthfront to deliver digital wealth management offering to millennial and Gen Z affluent investors
Zurich, 26 January 2022 – Today, UBS and Wealthfront, an industry-leading, automated wealth management provider serving the next generation of investors, signed an agreement whereby UBS would acquire Wealthfront in an all-cash transaction valued at $1.4 billion. Through this acquisition, UBS will accelerate its growth ambitions in the US, broaden the firm’s reach among affluent investors and expand its distribution and capabilities.
With over $27 billion in assets under management and more than 470,000 clients in the US, Wealthfront’s award-winning, state-of-the-art platform helps clients easily manage their wealth by providing access to financial planning capabilities, banking services and investment management solutions. Following the transaction, Wealthfront and its clients will benefit from access to UBS’s leading wealth management capabilities, including the UBS Chief Investment Office’s best-in-class thought leadership, an unrivaled global footprint, and deep products and services shelf.
“Adding Wealthfront’s capabilities and client base to our global investment ecosystem will significantly boost our ability to grow our business in the US,” said Ralph Hamers, Group Chief Executive Officer of UBS. “Wealthfront complements our core business in the US providing wealth management to high net worth and ultra high net worth investors through trusted relationships with financial advisors, and will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors.”
Wealthfront’s primary focus is on millennial and Gen Z investors, a client segment with significant domestic growth potential. With more than 130 million investors in the US alone, millennials and the Gen Z population together comprise a high growth segment that will own an increasing share of the world’s wealth. As UBS looks to establish and grow relationships with additional affluent clients, Wealthfront’s capabilities will become the foundation of its new digital offering which will also include access to remote human advice. In addition, Wealthfront will expand UBS’s existing offering through the firm’s Wealth Advice Center, which focuses on serving core affluent clients, and its Workplace Wealth Solutions business, which works with employees of corporate clients on equity plan participation, financial education and retirement programs.
“Partnering with UBS will allow Wealthfront to offer our clients additional value-added services and best in class research that will help accelerate our vision to make growing wealth delightfully easy,” said David Fortunato, Chief Executive Officer of Wealthfront. “We couldn’t be more excited to have found a strategic partner who has the same view on the power of technology as we do. We look forward to providing our service to even more millennial and Gen Z investors.”
Wealthfront’s existing clients will see no immediate change to their experience and can look forward to benefiting from UBS’s breadth of products, services, and intellectual capital. Clients will continue to have access to automated investing and personalized financial planning, which provides the ability to link and view outside accounts to better tailor services to each individual client. In addition to investing services, clients will also continue to have access to Wealthfront’s banking services, including securities backed loans, instant transfers to investment accounts, direct deposit, bill pay, and transfer services.
Wealthfront will become a wholly owned subsidiary of UBS and will operate as a business within UBS Global Wealth Management Americas. The transaction is currently expected to close in the second half of 2022, subject to closing conditions including regulatory approvals.
UBS Investment Bank is serving as financial advisor to UBS and Sullivan & Cromwell is acting as legal counsel. Qatalyst Partners is serving as Wealthfront’s exclusive financial advisor and Fenwick & West is acting as legal counsel.
About UBS
UBS convenes the global ecosystem for investing, where people and ideas are connected and opportunities brought to life, and provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as to private clients in Switzerland. UBS offers investment solutions, products and impactful thought leadership, is the leading global wealth manager, provides large-scale and diversified asset management, focused investment banking capabilities, and personal and corporate banking services in Switzerland. The firm focuses on businesses that have a strong competitive position in their target markets, are capital efficient and have an attractive long-term structural growth or profitability outlook.
About Wealthfront
Wealthfront integrates investing and banking services to make it delightfully easy to build long-term wealth. Through the power of automation, the company delivers personalized products to help both sophisticated and new investors learn, lower costs, and grow wealth. Wealthfront is one of the highest rated financial apps in the Apple App Store and has been named the best robo-advisor and best cash management account by NerdWallet and Investopedia. The company currently oversees $27 billion for over 470,000 clients in the US. To learn more please visit www.wealthfront.com or download the app on the App Store or Google Play.
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