UBS shifts from integration to growth in the Americas

UBS has entered a new phase in its Americas structured solutions business following the integration of Credit Suisse, with the focus now shifting from combining platforms and capabilities to driving growth across wealth management, insurance and intermediary distribution.

Investors increasingly want a toolkit, not a single solution - Erica Yeu

“The first chapter was integration. The next chapter is growth,” says Erica Yeu, Americas head of structuring at UBS.

The US remains one of the fastest-growing structured solutions markets, with US structured products issuance expected to surpass US$330 billion this year, according to the bank, which is targeting further growth by broadening its solutions offering across equities, fixed income, credit, quantitative investment strategies, actively managed certificates (AMCs) and cross-asset solutions.

The bank has combined UBS and Credit Suisse expertise while continuing to make targeted external hires across sales, structuring and trading. Its ambition, Yeu says, is to become the issuer of choice for structured investment solutions.

“From a client perspective, the opportunities are substantial. We see significant opportunities across wealth management, insurance and intermediary distribution channels,” says Ian Merrill, Americas head of structured equity derivatives sales at UBS. “We continue to see strong industry tailwinds from generational wealth transfer, advisor succession and growing demand for customised investment solutions.”

Merrill joined from MerQube in March as the bank’s new Americas head of retail structured products, replacing Kunal Malhotra who left UBS alongside two other senior members of the US distribution team during the same month.

The shift comes as structured solutions continue to expand beyond traditional notes, with insurance and exchange-traded vehicles becoming increasingly important channels for outcome-oriented strategies. For UBS, this convergence creates an opportunity to leverage its structuring, trading and distribution capabilities across markets while responding to changing investor preferences.

A broader platform

UBS’ US structuring team now brings together specialists across equity derivatives, quantitative investment strategies (QIS) and fixed income solutions.

Bringing together different skill sets and perspectives creates a stronger environment for innovation and product development, according to Yeu (right).

“Many of the interesting ideas in the market come from combining perspectives across asset classes rather than operating within traditional product silos,” she said.

“We have also aligned our structured distribution coverage across insurance clients, intermediaries and distributors spanning FIAs, Rilas, structured products and structured ETFs,” Merrill said.

“As clients increasingly seek similar investment outcomes through different wrappers, closer alignment across our teams allows us to deliver a more seamless client experience and better connect capabilities across channels.”

Client demand remains constructive, with advisors and distributors increasingly looking for investment solutions that are intuitive to explain, easy to implement and supported by a clear investment rationale.

Interest remains strong in themes including artificial intelligence, power and resources, alongside demand for differentiated and customised investment solutions, according to Yeu.

“Investors increasingly start with the outcome they are seeking and only then think about the product, asset class or wrapper,” she said.

Scaling customisation

Technology is becoming increasingly important as the industry seeks to deliver greater levels of customisation without adding complexity to the client experience.

UBS is investing in technology and automation across the structured solutions lifecycle, from idea generation and pricing through execution and post-trade servicing.

“Technology is not a substitute for expertise. It is what makes customisation scalable,” Yeu said.

“From a client perspective, expectations continue to evolve. Clients increasingly expect faster response times, transparency and a seamless experience from idea generation through execution,” Merrill added. “Technology is helping us meet those expectations more effectively.”

One of the structural trends is the convergence between different investment wrappers.

Concepts that originated in structured notes are increasingly appearing in FIAs, Rilas and structured ETFs, while the underlying investor objectives remain broadly consistent.

“Ultimately, investors care about outcomes, not wrappers,” Yeu said.

The opportunity is to match the desired investment outcome with the most appropriate delivery vehicle. The strongest innovation opportunities are emerging where insurance, quantitative strategies, structured products and ETF expertise come together around a specific client need.

“Clients increasingly expect a consistent investment experience regardless of wrapper,” Merrill noted. “That creates opportunities for firms that can connect capabilities across insurance, structured products and ETF platforms.

According to Merril, the FIA market remains an important growth opportunity, while structured ETFs are creating new ways to deliver sophisticated investment outcomes through transparent and scalable vehicles.

“We believe UBS is particularly well positioned because we can bring together insurance expertise, structuring capabilities and broad distribution relationships under one platform,” he said

“Distributors are increasingly focused on delivering better client outcomes while keeping the advisor and end-client experience simple. Customisation and operational efficiency are no longer trade-offs. Distributors increasingly expect both.”

Balancing income, protection and participation

Investors are also becoming less focused on choosing between individual objectives such as yield enhancement, downside protection and market participation.

“Clients are not choosing between participation, income and protection in isolation. They are looking for the right balance of those objectives based on their individual goals and market views,” Merrill (right) said.

“Today's environment provides advisors and investors with a broader toolkit to build portfolios around specific objectives and risk tolerances.”

“From a client perspective, higher rates have broadened the opportunity set and made certain solutions more compelling. That has supported continued demand across both structured products and insurance solutions,” Merrill added.

The rise of structured ETFs has introduced another dimension to the market, but UBS does not view the vehicles as simply competing for the same assets.

“Investors increasingly want a toolkit, not a single solution,” Yeu says.

Structured ETFs bring structured investment concepts into a transparent and scalable wrapper, while structured products remain well suited to highly customised risk-return profiles.

“Our focus is less on the wrapper and more on helping clients achieve the investment outcome they are seeking. We expect different wrappers to continue coexisting and serving different client needs,” said Merrill.

The next phase of growth

The opportunity over the coming years will be shaped by the ability to deliver increasingly sophisticated outcomes while maintaining scale and simplicity.

Demand remains strong across equities, fixed income, quantitative investment strategies and multi-asset solutions, while the convergence of investment wrappers continues to create new opportunities for innovation.

“We see significant opportunities to continue expanding across wealth management, insurance and intermediary distribution channels,” Merrill said. “Clients are increasingly looking for partners that can combine innovation, execution and broad market access.”

The integration of UBS and Credit Suisse has created a broader platform from which to pursue that growth.

“The combination of talent, technology, product expertise and distribution capabilities that we have assembled positions UBS well for the next phase of growth,” Yeu concluded.

_{Image: Angel Luis/Adobe Stock}

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