Following the launch by UBS Asset Management of UBS Partner, a white-label technology solution aimed at reshaping the advisory process and client service offered by banks, SRP spoke to Thomas Stokes (pictured), head of UBS Partner, about the platform functionalities and how structured products could capitalise on the increasing focus on portfolio construction
UBS Partner, which forms part of the UBS Platform Solutions offering, will scan client portfolios on a daily basis, assesses individual portfolios against corresponding risk profiles, key instrument quality criteria and investment goals, according to Stokes.
The platform has been designed to identify those clients which are not on track to meet their personal financial goal, and offers tailored, actionable investment options to best help them get back on course, said Stokes.
"Structured products sit alongside other products in these portfolios, and can be offered as part of the asset allocation process if they fit with the risk profile and investment objective," said Stokes, adding that the platform is products agnostic and will identify how a structured product is performing, if it's approaching its maturity date, etc.
"The offering of structured products is a function of the partner bank, but the platform can cope with structured products and track their performance during their life cycle," said Stokes. "If a client portfolio has structured products, the platform will track the performance versus the investment goal and offer other similar solutions as required. The platform will also be able to identify which kind of product fits with each different client profile (defensive, moderate, aggressive). The platform can support structured products and any white labelled bank can also offer structured products."
The launch of UBS Partner responds to client changing needs, costs pressures and new investor protection regulation affecting the wealth management landscape, according to Stokes.
"UBS Partner is one component of UBS Asset Management's platform solutions (along with Fondcenter and Fund Management Services) and supports compliance with Mifid 2 and Priips/Kid requirements and can generate Kids for any product that is deployed in a given portfolio," said Stokes. "UBS Partner is an advisory support platform which we will white-label to select third party banks targeted at the advisory space as opposed to the delegation/discretionary space."
The market has seen a significant number of robo-advisers entering the market and Stokes believes they have done a 'good job' in shaking the tree in the wealth management industry, however robos typically focus on delegation/discretionary solutions and they have limitations.
"UBS Partner is not just about bundling solutions into different asset classes across the risk profiles, but about providing our wholesale bank partners with a systematic portfolio quality screening tool which takes into account individual risk profiles, key instrument quality criteria and investment goals and preferences, as well as what the advisory client holds in his or her portfolio," said Stokes.
UBS AM has been working over the last few years to tackle these challenges in the industry and it has invested heavily on technology and infrastructure (algorithms, processes, tools...) to respond to the change in paradigm, according to Stokes.
"With UBS Partner we are offering relationship managers (RM) with wholesale partner banks a way to look at portfolios every day, identify any gaps in the investment objectives and offer customised solutions, individual to each portfolio," said Stokes. "These will then reconcile the portfolio with the investment objectives set out during the profiling stage and provide clear and simple rationale to clients."
Traditionally, RMs do the heavy-lifting and this new offering is providing the machinery to assess client portfolios on behalf of the RM and manage them accordingly, said Stokes.
"UBS Partner provides a very efficient tool for RMs to be on top of their client portfolios and provide them with customised solutions to keep them on track in relation to the investment goal," he said. "By definition, all advice given to clients can be retraced back to the investment objective and this is in line with Mifid 2 and investor protection requirements."
UBS Partner will also enable the Swiss bank to provide added value to its wholesale partners by helping to deliver customised solutions to their end clients, for which an advisory fee is worth paying for, according to Stokes.
"UBS Partner leverages proven, world-class technology within UBS, and provides a full portfolio advisory support service including profiling, portfolio quality assessment, customised remediation, reporting, workbench for RM etc," said Stokes, pointing that the platform is set up in a way that allows the bank to also provide it as a white label offering to other banks.
"It's a modular, cloud-based platform (with Microsoft Azure), that is very high on security and low on latency," said Stokes. "As it is modular, it does not need to be adopted fully by the client. It's also a content agnostic offering, which means that we don't push our own asset allocation strategy and our own investment products."
UBS Partner is in the integration phase with Banca Generali and is in talks with a number of other banks.
"This makes part of our plan to enrich and deepen our partnerships with outside clients by combining proven, world-class technology relevant tools and content," said Stokes. "We're quite selective regarding who we talk to and we're looking for partners that have a similar ethos than to us."
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