The 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:
“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.”