The Exchanges

Q When you look today, what is the size and breadth of the platform that you're overseeing?

A Let's take a step back and just look at the UBS platform from a large perspective. We're the world's largest global wealth manager. We manage on our wealth platform alone over four trillion dollars. If you include our asset management company, we're over six trillion dollars of wealth around the world. 2.1 trillion of that wealth sits in the United States. So we're a very large wealth manager in the U.S., but also globally. We're the largest wealth manager in Asia. We're the largest wealth manager now in Latin America after our Credit Suisse acquisition. And we're the fourth largest wealth manager in the United States based on assets under management from wealth clients. Also the largest wealth manager in EMEA. That global perspective and insights and the ability to connect clients and learn from clients regardless of where they live, I think is really the special sauce of UBS. For example, if we have clients in the United States that are looking for insights from someone in Asia, or maybe they want to start a business in Asia, we can make those connections really quickly. We have boots on the ground everywhere in the world, and we have clients on the ground from everywhere in the world. That's the exciting thing about our business. In the US, two trillion dollars of assets under management, about 60% of those assets are in ultra high net worth assets. It's been the fastest gro…

AI assessment note: “We manage on our wealth platform alone over four trillion dollars.”

Q lot of simple math that says, oh, and the private wealth channel only has two, three, four percent of their money in alternatives. The institutional channels, a multiple of that. If only a percent moves and you look at Two trillion dollars a percent is a pretty big number, twenty billion dollars. What do you see happening in asset allocation shifts within your client base over the next few years?

A At our firm, in our private wealth business, it's just about eight percent as adults. I think it should be 20. Our CIO's calling for higher than 20, so we still have a long ways to go. Our alternatives managers know that, too. It's a big opportunity for them. Our clients in most cases are demanding it. Our advisors in some cases have to get more comfortable with it. Just look at endowments and foundations out there that have a much larger percentage. We think it's important for the right client the way they have the right time horizon. We think they can produce alpha in the portfolio. We think it takes out some of the volatility. We just think it for all the right reasons. But it's not easy to convince someone to do something when they don't have instant liquidity, where they can sell it, have daily marks on their statements or online service. So we're gradually getting to that spot. Looks like we're in a pause right now a little bit. Private equity, I think, has been difficult. And one of the reasons is volatility of the market. But at the same time, exits have disappeared right now. Most people invest in private equity. They're hoping they're going to get some money flowing back to them in the form of exits, whether that's IPOs or acquisitions, and certainly those have slowed over the last couple years. In environments like this, that could slow things down in terms of privat…

AI assessment note: “it's just about eight percent as adults. I think it should be 20.”

Q When you hone in on just the investment part alongside all the services, where do you centralize and where do you allow the decentralization of decision-making?

A Our advisors, what I love about them is they're almost like independent contractors. They work for UBS, but they're entrepreneurs. They have their own styles and philosophies. Now, we have guidelines and guardrails in terms of what they can recommend to clients. They'll follow our chief investment office strategy, but they always have their own twist to it. One private wealth advisor may have a different overall strategy than the advisor in the office next to them. We think that's what makes us great is that entrepreneurial spirit that they bring to it, but more often when they bring in our specialists to talk to their clients about strategic asset allocation or the right alternatives to put in a portfolio as you build it out, we build a little bit more consistency into the overall offering.

AI assessment note: “They'll follow our chief investment office strategy, but they always have their own twist”

Q How does that platform come together? How you architect the different investment options that advisors can choose from?

A If you take a step back on the larger platforms, we manage two trillion dollars of wealth in the United States. It starts with just pure asset management using separately managed accounts, using indexing. In some cases, advisors build their own portfolios. Most of it is tied to a fee. Very little of our business is actually tied to commissions today. So whether our advisor uses separately managed accounts from all the largest asset managers in the world, including some you would never know. We try to give color all of those managers to our private wealth advisors, and then they can decide on the asset allocation. That's the foundation. Then you have other products and services maybe above that. You can think of alternatives. Alternatives will be not for everyone, but they're going to be For the wealthier client segment and for the advisors looking for a little bit more sophistication and maybe alpha in their portfolio. We have a wide number of people in our organization that monitor managers that decide who to bring on the platform and not to bring on the platform. Our separately managed accounts are continuously going through due diligence processes to make sure they're doing what they say they're going to do and that the same management teams are in place that we hired them with because we have a responsibility to our clients as well. Then you get to the alternative space, an…

AI assessment note: “We have a wide number of people in our organization that monitor managers that decide”

Q And if you take that up a level of the advisors and their relationship with UBS, there's long been a history of, you know, as you said, the onset, advisors as independent contractors. And sometimes there are deals and they take their book of business and they move to a different bank and then they move back and they're back and forth. How has that played out over the years?

A My view is real simple. If we can't create the best platform for them to operate on, then they should probably leave. My job, probably more than anything, is to work with partners like Jerry Pascucci and Solita Marcelli, who's our CIO, and everyone else in the organization to make sure we build the best platform for them to serve their clients. In the United States, when an advisor leaves from one firm to the other, they typically take around 80% of their clients with them. When we hire an advisor from another firm, we typically get 80 or more percent of their clients with them. Sometimes those numbers change a little bit. It's normal course of everyday business. I don't like it. I wish everyone would stay here, but my view is, listen, our job is to build the best platform for them and their clients, and sometimes clients say, I don't want to leave, and that's refreshing, but I respect the financial advisor. I respect what they do. I view my role as a partner with them, and if they think they can do it better at another place, I wish them well. The attrition numbers aren't as high as people think. It's a small percentage every year annually of the overall business. Actually, it's smaller than what anybody would guess, but they're headline grabbing sometimes. And if you're a client, it could be aggravating. It's like, I got to move. I have to sign paperwork, and I don't think cl…

AI assessment note: “when an advisor leaves from one firm to the other, they typically take around 80%”

Q So if that's one of the themes, what are the other four that you're out talking to the teams about today?

A That's one is, 2025 was going to be a year to be tested. The other four themes are really long term. The second one is, the family is always the major issue. It's all about family. And so if you think about this whole demographic shift we're going through right now, is most of the wealth in the United States of America is in the hands of baby boomers. There were seventy seven million baby boomers on the planet. Today there's probably around seventy million baby boomers because they're starting to die. Born between 1946 and 1964. The youngest baby boomer is 61 years old. The oldest baby boomer is 79 years old. But the average baby boomer is in the upper end of that. What happens is, this baby boom generation, they're in the wealth accumulation stages of their life, about to go to the wealth distribution of their life. Depending on who you look at, 60%, 70% of the wealth in the United States is in the hands of those people. And so that's not going to change anytime soon. So we have this great opportunity to help them make sure they manage their wealth and how to make sure they distribute it properly, how to get it in the right hands at the right time, and how to make sure that their kids and their generation three is financially responsible. If we focus on that over the next five to 10 years, it could be the greatest five to 10 years in the industry for a financial advisor. At th…

AI assessment note: “The other four themes are really long term. The second one is, the family”

Q I'd love to understand how you organize all this. There's the U.S. piece, there's this global piece, and you mentioned, yeah, you should be able to have access information, but 660 just in the U.S., How do you even start to think about how this all comes together?

A We have different managers and locations around the country, and managers will report into us, so it sounds complicated, but it's really not because everyone reports into another channel, and that channel may report into me. Globally, I have people around the world that do what I do. We have regular communication and contact, and very collegial. For me to pick up the phone and have a discussion with someone in Asia or the Middle East, So, sounds complicated, but it actually comes together pretty well, and I've also been running this business for 14 years. Maybe I'm simplifying a little bit more than it needs to be, but the relationships that I've built with our internal stakeholders in the organization, as well with our financial advisors at the firm, and also our external stakeholders, our partners and asset managers that we work with, probably makes it a little bit easier for me.

AI assessment note: “managers will report into us... everyone reports into another channel, and that channel may report into me”

Q As you stratify that client base across the ultra high net worth, the high net worth, the mass affluent, how different are the asset allocations today?

A Sticking with this theme of alternatives, the further you go up, the Wealth curve, the significantly more alternatives are in there, either through us or them doing it on their own. So as we allocate capital to these types of programs, you'll see our wealthier clients have a larger percentage, more than eight percent usually, to the alternative space, more heavily focused on private equity than hedge funds. That's been a flip. 15 years ago, that was all hedge funds. Now it's mainly private equity. And as you go down, it's a much smaller number. But those clients in that high net worth, let's say a million to ten million dollar range, are trying to find ways to have access to the alternative platforms. And that's where you go into the perpetual funds and the daily liquidity funds and trying to gain a little bit non-correlated, if possible, returns on their investments. And sometimes going through a market gyration that we're going through, I think it's going to make everybody rethink it. I think long-term, the markets are going to continue to perform. This is another glitch we go through every five or six years or so, but there's always a little reset. As I tell our advisors and our clients all the time, listen, why not use this as an opportunity to sit down and maybe tweak the portfolio based on the new paradigm that we see happening? Not a knee-jerk reaction, but a longer-term…

AI assessment note: “the further you go up, the Wealth curve, the significantly more alternatives are in there”

Q Walk me through a manager first getting on the platform. What might their time look like in getting from not having a relationship to having a very successful and broad relationship?

A First of all, they're going to have to have a distribution force. They're going to have to have a, I don't know if you want to call it a wholesaling network, so to speak, because our industry still is a relationship business, and you can post all the numbers you want to, but there's got to be some type of human interaction when you're talking about an illiquid, more complex investment. So first of all, you're going to have to have some sort of a network out there, and it doesn't have to be large, but enough for someone. If they have a question, an advisor can pick up the phone and give them a call. So that's number one. You have to have a network of people, wholesalers, however you want to describe them, that can actually go press the flesh, talk to people individually. What we've done with a couple of our partners here is I'll do what we're doing right now. I'll do a podcast slash webcast, and we'll talk about their fund, especially when they're just hitting the platform, and very similar about, give me a little bit of your history. How did you get here? How did you get in this fund? Now tell us about the sector, the scene that you're going after, and How can clients participate in it? It kind of gets broad distribution that way. But what we found is that the most successful ones are already big and already have those networks in place. The newer ones struggle with it a little…

AI assessment note: “I'll do a podcast slash webcast, and we'll talk about their fund”

Q In those situations with finite capacity, how does the allocation process work across the advisor base?

A We'll come out early with the fund and clients will have to submit. Indications of interest for it for their accredited clients, usually for these types of funds, and then we just usually go through to identify who are the clients that we know are capable of investing in these investments, who are the advisors that we know understand these types of investments, and how do we make sure the clients get their fair share. Sometimes the smallest ones are the most demand, and it's hard, but we know if we're going to come out with something similar, we'll try to do that to complete them so we can fulfill the demand that we have. That's the scarcity issue. And having scarcity sometimes gives me more confidence in the manager because they're not overextending themselves, and we have to talk to our advisors and our clients about it, that you may not get this one, but you'll get access to fund number two, and that's a great thing for the manager because they can allocate funds to one offering and be focused on that particular fund, and then if they know they have additional capacity, we open up another one. I feel like they can manage it better themselves.

AI assessment note: “clients will have to submit. Indications of interest for it for their accredited clients”

Q One last question before I want to ask you a couple of fun closing questions. You were sitting at top, the largest wealth manager. In addition to some of these initiatives, how do you think about making sure that you stay at the top and continue winning?

A It starts with clients first. If everything we do is focused around clients, Then everything else is going to work out. I mean, personally, I spend a tremendous amount of time understanding markets, understanding demographics, understanding wealth, what people need, what they're asking for, how to help them professionally and personally. And then that translates to financial advisors, is how do we become the best partners we can be for our financial advisors? So to build them the right platform, and if we continuously strive and challenge And if we continue to push ourselves, we'll have the right capabilities and product sets for our advisors to be super successful. It starts with the client. It's partnering with the advisor. It's never being afraid to listen to a suggestion. No suggestion's stupid. They're all good. We can't implement them all. The second I lose that is the second we go the other way around. The two things that I see that bring people down or businesses down or countries down, you name it, Is ego and arrogance. If you think you're doing great, and your ego gets really big, it usually turns into arrogance, and when it turns into arrogance, the end is near. You just don't know when. It's coming, and I've seen it happen throughout my career, and so I try to check my ego at the door. I hope I don't have arrogance. If I do, I hope people call me out on it, and I th…

AI assessment note: “It starts with clients first. If everything we do is focused around clients”

Q On that second theme, what do you do differently in the investment side of the house knowing that, let's say, the assets have to have longer duration than they used to?

A We have to make sure we can maintain a competitive rate of return. We have to outpace inflation. Inflation's for real. Many of these clients don't want to take undue risk either. They've made their money. Sometimes I tell people you're the alpha generator in the equation because that was the business that you started. Our job is to preserve your wealth and make sure you don't blow it. But preserving wealth doesn't mean just to buy a fixed income security and hold on to it for maturity. Preserving wealth is to make sure we preserve it with inflation involved. So we have to have returns that outpace inflation. At the same time, we think that we can give you a consistent long-term return where you'll outpace the normal living standards. And so it could be, is it the traditional sixty-forty asset allocation model? I don't know if that's it anymore, but we know that we can talk to clients about thinking longer term with some of their assets. Maybe some of your assets you need more liquidity, shorter term, and so we'd be more conservative there. And then maybe there's intermediate term for time horizon on those assets for the next five to 10 years, we can be maybe more aggressive. But what about the money you'll never need? Why don't we Think about longer term investments, things that we probably will never touch, but if we do, it'll be 15 years from now, that maybe we can take A lit…

AI assessment note: “Why don't we Think about longer term investments... we can take A little bit more risk”

Q From a manager's perspective who's talking to the team on the platform, how do they think about the process of educating this very diverse base of advisors?

A That's the tough one, because we have advisors at a firm like ours, and all the other firms in the U.S., by the way, that have no interest in doing alternative investments at all. And so how do you break through? How do you get anyone's attention, whether it's the advisor, or whether it's Jerry and the due diligence team? The funds have to be able to demonstrate and provide evidence that they have a capability that's worthy of our clients' needs. And they can do that locally through our office managers. We'll have people come in and talk to them. They can come directly to me. We are not going to offer any fly-by-night fund of the days. And so the key is, can you provide evidence? Can you demonstrate your track record? And then what are you going to do going forward? We have a pretty rigorous due diligence process. Some say maybe more rigorous than others, but I think that's good. We have a duty to our clients to make sure that we do that. And everyone wants to be on our platform, by the way. When you manage over five trillion dollars of wealth from two-legged individuals primarily, and you do it globally so it's not just isolated in one geography of the world, the benefit is everyone wants to be on our platform. The challenge is, is that we have a lot of people we have to say no to. It takes a lot of time to go through the diligence work on them because it's a unique platform d…

AI assessment note: “they can do that locally through our office managers. We'll have people come in”

Q The path of accidental executive. What were the most important steps for you in that path?

A I view my job as really a leadership position, and I love the business. I love clients. I love working with financial advisors. I love directing strategy to try to think five years ahead to try to put our advisors in the best position and our clients in the best position. I love the leadership principle of it, and I have hundreds of private wealth advisors that report into our business here at UBS in the Americas. I think of it as like the special forces of our UBS army in the United States. And I think we're really good at what we do, and so the passion of me to help people grow professionally and help their clients do even better is what drives me at this. I tell people all the time, my job is to help our clients do better for themselves, our advisors do better for themselves. If we help our clients do well, our advisors do well as well. It's like one large partnership.

AI assessment note: “I view my job as really a leadership position, and I love the business.”