Swiss Banking Giant UBS Sells its Robo-Advisory Platform to US-based Robo-Advisory Firm SigFig - The Industry Spread

Karthik Subramanian

Karthik Subramanian has been a professional trader and fund manager over the last 18 years. He is basically a software developer who made the transition to financial domain around 18 years back as the attractiveness of the financial markets proved too much for him. He lives in Chennai in India along with his wife and son. He began his career as a software developer in 1999 and then gradually moved into the financial industry as he began trading stocks in his pastime. He then moved into the financial markets full time and then shifted his focus to the FX markets due to the liquid nature of these markets. Since then, he has been trading FX diligently and his favourite pair are the EURUSD and EURJPY. Over the last couple of years, he has found blockchain to be of high interest and considering his background in software and finance, he has since assembled a team of highly talented developers who have since worked on a variety of projects like crypto exchanges and blockchain architecturing. Now, he balances his time between trading and commenting on both the FX and crypto markets. He has worked with many publications including FX Street and Finance Magnates, which has helped him gain experience and also recognition across the industry. He loves to write and this passion has helped him to reach out across the FX and crypto industry. Right now, he works on his pet projects in the FX and crypto industry and spends his time writing and managing his blockchain team and helping it to reach higher.

SigFig

Swiss Banking Giant UBS Sells its Robo-Advisory Platform to US-based Robo-Advisory Firm SigFig

August 30, 2018

UBSThe Swiss-banking giant, UBS has announced the sale of its Robo-advisory business platform, SmartWealth platform to a California-based Robo-advisor SigFig. The sale was initiated due to the result of intense competition in the space and limited short-term potential of the business. 

As per the part of the deal, UBS is selling off the technology to the US-based firm and has stopped adding new clients to its platform although existing customers can still log in. SigFig was launched in 2007 and UBS has an equity stake in the company and as a part of the deal, it is understood that UBS staff will join the SigFig team. The financial terms of the deal is not disclosed.

The UBS SmartWealth platform was launched in 2016 and is one of the most expensive Robo-advisory business in the space. It aimed to take the advantage of technological advancement at that time to introduce wealth management services to new group clients, requiring a minimum investment of just £15,000.

It is one of the most expensive wealth management platforms and was charging up to 1.29 per cent on the investment at the lowest end of the portfolio size compared with 0.48 per cent charged by Evestor for portfolios of the same size. The reason for the higher cost is because it used actively managed investments and discretionary management teams unlike passive teams in other Robo-advisors.

 UBS said in its memo:  

UBS SmartWealth“We are proud of the award-winning technology we have developed and were satisfied with the initial commercial progress of UBS SmartWealth.”

“Having conducted a thorough assessment, however, at this time we believe the near-term potential is limited and have therefore decided to close our digital-only offering in the UK.”

“We are confident that SigFig is best placed to accelerate and broaden the commercial prospects of the intellectual property behind UBS SmartWealth.

“We believe the decision serves the best interests of the business and will allow us to invest further in other client-facing improvements, whilst sharing in the future success of the IP we have created via our equity holding and ongoing partnership with SigFig.”

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