UBS’ Wealth Management division recently won the title of best global private bank for the fourth time in the Euromoney awards. In the light of this success, European CEO’s Martyn Cornell spoke to Matthew Brumsen (right), Head of UBS Wealth Management UK, Northern and Eastern Europe, about his strategy for expansion

The wealth management market, Matthew Brumsen says, bringing out a simile he admits may be “a bit cheesy”, is like the market for MP3 players. “A few years ago it was unusual to have an iPod; now it’s unusual not to have an iPod. Similarly, we want to move from a situation where it is unusual to have a UBS wealth management account to one where it is unusual not to have an account.”

Business is certainly growing fast for Mr Brumsen, head of UBS’s wealth management operations for the UK, Northern and Eastern Europe, and his team. In the UK alone, invested assets under management for clients have expanded tenfold since the start of the century, to approximately £30bn, and the number of client advisers has grown to around 250. UBS Wealth Management has just won the title of best global private bank for the fourth time in the Euromoney awards, “rolling out its holistic wealth management solution to the broadening needs of high-net-worth clients,” in the magazine’s own words.

Mr Brumsen, who joined UBS six years ago and who took up his current post in September last year, is determined that there will be no resting on this latest set of laurels. “In the UK we are just at the start of our growth ambitions. The foundations that we have laid down give us a good opportunity to really accelerate from here. The pace of growth achieved so far puts us in the top three by size and we also have a claim to be the number one by reputation. The Euromoney awards don’t mean everything, but it’s nice to be voted number one.”

While the wealth management side has been booming, the more high-profile investment banking wing of UBS has been hitting some rough ground, according to some reports. However, UBS’ pre-tax profit from wealth management grew 27 percent in the fourth quarter, which caused Matthew Lynn, a Bloomberg News columnist, to declare that “UBS needs to get back to its core business [wealth management] fast.”

Matthew Brumsen would not disagree with the suggestion that wealth management is the core of UBS’ business, nor that its expertise makes it highly attractive to clients wanting someone to take care of their millions. Wealth management “is at the heart of UBS. It represents the bank’s heritage and means that we understand what is important to wealthy individuals and know how to look after their long-term financial interests. It also makes it an attractive place for talented bankers to flourish. “One of the big changes in wealth management over the past few years”, Mr Brumsen says, is “the quality of the individuals who work for the wealth management side has escalated significantly. There used to be a view that wealth managers are ‘nice’ and that investment bankers are ‘smart’. This is an anachronism. Within UBS we have seen staff moving in both directions. The DNA of wealth management and investment banking is coming together.”

“We have a very strong link to our investment bank, including a ‘corporate advisory group (CAG)’, designed for wealth management clients who need investment banking services. For example, we have a number of clients who, as you’d expect, own quite significant-sized private businesses, and we can either introduce them to our investment bank or execute the transaction ourselves via CAG.”

The synergy between the two sides is vital to what makes UBS attractive to clients, Mr Brumsen says. “What we’ve found is that there is a merging of the two business approaches, not least because wealth management clients now have available to them products and services that were previously only available to institutions,” he says.

“For me, there has been a seismic change in wealth management recently, initially triggered by the quite vicious equity bear market of 2000-2003. This resulted in a much stronger recognition of the risks inherent in holding equities in a pure form and has led to a number of exciting and innovative developments. Structured products, for example, now allow you to adjust the risk and return profiles of any number of individual asset classes to make them better fit the client’s own objectives. And with volatility at historically very low levels, private individuals can buy insurance against capital loss much more cheaply than before.”

Part of UBS’ expansion has been to target individuals outside the ‘super-rich’ bracket, to tell them that wealth management from a big bank is suitable for them too. “Although a client’s investment portfolio represents the core of our relationship with them, we can offer them much more besides.” says Mr Brumsen. “It starts with primary needs – for example, your pension fund, life insurance, school fees and general regular income requirements. In other words, the things you have to take care of before you can invest your money for long term capital growth. Then to take care of clients’ investment needs we have been able to demonstrate a very wide range of solutions, sourced from both within and outside UBS. Over and above that, we can help with issues such as philanthropy, family governance, art and wine. Putting all these together, we think that we are uniquely placed to be able to offer advice across our client’s whole spectrum of needs and concerns.”

The growing number of wealthy individuals in Scandinavia and Eastern Europe, particularly Russia, is also an important growth market for UBS. “These represent two important areas of the world for us, since wealth is both concentrated and fast-growing. It is my job to make sure that they see the best of what UBS has to offer. And that is why London is a fantastic place to be based. The ideas and energy coming out of this city mean it is challenging New York as the world’s leading financial centre. It is my job to make sure these are used for the benefit of clients based not only locally but also elsewhere in the world. And equally we are in a position here to benefit from the huge expertise and knowledge that has built up across a truly global financial institution with wealth management at its heart.”

The current bull market, now approaching four years in maturity, has attracted a number of players into the wealth management market that are not necessarily going to last the course if times get rougher, Mr Brumsen suggests. “People need to remember that UBS is in this business for the long term. We want to move from a position of strength to one of dominance. Whether it is the people we recruit or the approach we take to clients, we are always looking for solutions that stand the test of time. And that, we believe, is what will ultimately differentiate us from the competition.