UBS Monaco Wealth Management Review

This article will review UBS Monaco Wealth Management’s solution.

For any questions, or if you are looking to invest as an expat, you can contact me on advice@adamfayed.com or using this form,

Introduction:

Wealth management – ‘Wealth Management (WM)’,which is also known as ‘Wealth Management Advisory (WMA)’, is a type of investment management and financial planning strategy specifically designed to suit the needs of wealthy clients.

The professional (who can either be an individual person or a renowned company) that takes care of the wealth management process is known by the name of ‘Wealth Management Advisors’ or ‘Wealth Managers’. 

Usually, Wealth Management includes services such as Financial Planning, Portfolio Management, Asset Allocation, Etc. Individuals who become wealth managers have a college degree (such as MBA) and experience in managing money. 

Some other backgrounds of a wealth manager include people who can be a Chartered Consultant, Investment Analyst, Financial Planner, Financial Analyst, etc., who have either been certified as one or have a subsequent amount of knowledge and experience in the particular field.

People avail of the services of a wealth manager when they require assistance with activities such as Retail Banking, Estate Planning, Taxation-related activities, Investment Activities, etc.

This is done by financial advisors/wealth managers by consulting the client and creating a tailored financial strategy depending on the financial needs and goals of the customer.

Wealth Managers create a strategy that will abide by the goals of a customer depending on the investment amount, risk tolerance and any other needs of the customer.

People often have a misconception that wealth management is nothing but investment advice. This is totally wrong as wealth management focuses on the financial needs and handling the assets of a client rather than just giving profitable ideas.

Some Wealth Managers can provide financial services related to any type of financial structure/investment vehicle. Whereas, some Wealth Managers specialize in specific financial categories.

In some cases, wealth managers might even require the services of an additional financial expert (such as an accountant, attorney, advisor, etc.) as well. Some might even provide banking services and philanthropic activities too.

Wealthy clients are known to be having more advantages with the help of wealth management services instead of normal individuals. This helps wealthy clients to meet with their financial needs (including the needs of their family) in the current situation or in the future.

Wealth Management advisors/wealth managers usually create a strategy, help in asset allocation, provide support with the portfolio management by continuously reviewing and rebalancing the portfolio depending on the goals, risk, etc. 

Wealth Managers charge a one-time fee from the clients for the wealth management services offered. Some might even charge an hourly fee or a percentage of commission from the assets under management.

Some of the leading Wealth Management/Private Banking service providers are ‘UBS’, ‘Bank of America Merrill Lynch’, ‘Morgan Stanley’, ‘Credit Suisse’, ‘J.P. Morgan Private Bank’, ‘Citi Private Bank’, etc.

‘Private Wealth Management’ – The Wealth Management service offered especially to a higher net worth individual is called ‘Private Wealth Management’.

Private Wealth Management services are required by clients who need advice on Estate Planning Vehicles, Business Management, Stock/Option planning, Hedging Derivatives for large blocks of stock, etc.

Asset Management – Asset Management is nothing but the management of assets in a portfolio. This can be the management of all the assets in a portfolio or just some of them.

Asset Management is usually done by Investment Banks, Financial Advisor, or a Wealth Manager. Financial Institutions offer a broad range of traditional as well as tailored products under Asset Management that might not be acquired by a normal investor.

The process involves somebody (either an institution or an individual) managing the investment on behalf of a client while improving the portfolio for gains and balancing the risk involved within the assets.

Generally, the advisors who deal with the asset management process often invest in asset classes such as equity, stocks, bonds, ETFs, fixed income, real estate, commodities, mutual funds, etc. by making use of analytical tools at the same time understanding the needs of a client.

The account provided by financial institutions usually provides the benefits of checks, credit cards, debit cards, automatic allocation of balances into brokerage services & money market funds, etc.

Asset managers provide advice on the investment depending on the financial situation of a client along with providing ratios for allocating assets that would be beneficial for them.

The rates charged by asset managers are based on a percentage depending on the assets under management. In most cases, the rates are progressive and usually decrease as the amount invested by the client increases.

Difference between Asset Management and Wealth Management – Asset Management, as the name indicates, is only involved in the activities of investments such as stocks, real estate, and other investment vehicles.

On the other hand, wealth management includes asset management and some other financial services such as tax planning, estate planning, insurance, retirement planning, education, etc.

Asset Management only specializes in improving the returns of a client by managing their investments, whereas, wealth managers often try to preserve and maximize the profits by involving in all of their financial activities.

Wealth Management might also require additional financial services from financial experts, lawyers, insurance agents, accountants, etc., depending on the client’s financial needs and goals.

‘Which is right for you’ – Depending on the financial needs of a client, people can choose either asset management services or wealth management services.

To put this in a simple way, if a person needs support regarding just the investments, asset management can be considered as a perfect choice for them.

If a person requires more complex financial services, which would take care of all their financial needs along with planning for their future, wealth management could be perfect. However, wealth management services are advantageous and often used only by the clients having a good amount of wealth.

Investment Banking – Investment Banking is a category of Banking, which has a primary objective of providing advisory activities in order to create capital for companies, governments and other entities. 

Investment Banks often act as the agent of a client, to whom they would be raising capital by issuing securities offered from that respective client.

The primary activities of Investment Banks include ‘Underwriting of new debts and equity securities for entities such as corporate companies & governments’, ‘Supporting in the sales of securities’, ‘Aiding to smoothen the process of mergers and acquisitions’, ‘Reorganizations’, ‘brokerage services for institutions as well as individual investors’, etc.

As per the statistics provided by the Wall Street Journal, the top investment banks in the world in 2020 are ‘Goldman Sachs’, ‘Morgan Stanley’, ‘JP Morgan’, ‘Bank of America Merrill Lynch’, ‘Rothschild & Co’, ‘Citi’, ‘Evercore’, ‘Credit Suisse’, ‘Barclays’, ‘UBS’, etc.

UBS – also known by the names of ‘UBS Group AG’, UBS is an investment bank cum financial service provider that is based in Switzerland. 

The primary products and services offered by UBS are Investment Banking, Wealth Management, Private Banking, Investment Management, Asset Management, Corporate Banking, Retail Banking, Finance & Insurance, Credit Cards, etc.

It was founded in the year 1998 by the merger of Union Bank of Switzerland and Swiss Bank Corporation. The headquarters of UBS is located in ‘Bahnhofstrasse4, Zurich, Switzerland’ and the worldwide employee count is around 60,000 people (approx.).

The services of UBS are accessible in more than 40 countries and it is also ranked as one of the top Investment Bank as well as Wealth Manager. 

According to the statistics available with us, the financial details of UBS as of 2018 are as follows:

Total Assets – $958 billion

Total equity – $52.92 billion

Net Income – $4.5 billion

Operating Income – $5.99 billion

Revenue – $30.2 billion

UBS is constituted of 4 major divisions, which are ‘Global Wealth Management’, ‘Personal & Corporate Banking’, ‘Asset Management’ and ‘Investment Bank’.

UBS has received a lot of awards, out of which some are:

• ‘Western Europe’s Best Bank for Wealth Management’ in 2020
• ‘North America’s Best Bank for Wealth Management’ in 2020
• ‘Middle East’s Best Bank for Wealth Management’ in 2020
• ‘Best Private Bank for Technology’ (worldwide)
• ‘Best Private Bank for Digitally Enabled Relationship Managers’ (worldwide)
• ‘Best Private Banking Services’ Overall 
• ‘Best Private Bank in Asia’ in 2019

Global Wealth Management division – UBS’s global wealth management services are specifically designed for the higher-net-worth individuals in the world. With the help of these services, individuals can expect to get access to a wide range of products and services related to advisory & investment.

Depending on the statistics of 2018, UBS has been known to be managing the largest amount of private wealth when compared to other contenders in this category.

By the end of the year 2018, it was estimated that the wealth management division of UBS had an employee count of 23,600 people across the world.

In the category of wealth management, the main rivals of UBS are ‘BOA (Bank of America)’, ‘Credit Suisse’, ‘Morgan Stanley’, ‘JP Morgan Chase’, ‘Wells Fargo’, etc.

‘Personal & corporate banking division’ – Under this division of UBS, financial products and services are offered to retail clients, corporate clients as well as institutional clients.

The products and services under this division are cash accounts, savings accounts, payments & retirement solutions, residential mortgages, advisory services and investment fund products.

Asset Management division – As for the asset management division of UBS, a wide range of products are offered, such as equity, currency, hedge fund, real estate and many more.

By the end of the year 2018, the asset management division of UBS had become responsible for $781 billion worth of invested assets and had $413 billion worth of assets under management.

As of 2020, UBS has around $928 billion worth of invested assets, which is quite a lot of money. Asset Management services are provided in 22 countries and the employees involved in the activities of asset management are 3,500.

The rivals of UBS in the asset management category are ‘BlackRock’, ‘Vanguard Group’, ‘State Street Global Advisors (SSGA)’, ‘Fidelity Investments’, etc.

Investment Bank Division – The Investment Bank division of UBS provides services that belong to securities, financial products, research in equities, credit, foreign exchange (FOREX), precious metals, etc.

The Investment Bank division of UBS is known to be having its presence in around 33 countries including some of the major regions such as ‘Shanghai’, ‘Singapore’, ‘Tokyo’, ‘Zurich’, ‘Frankfurt’, ‘Chicago’, etc.

The competitors of UBS in the Investment Banking division are ‘Goldman Sachs’, ‘JP Morgan Chase’, ‘Merrill Lynch’, etc.

Fees for Wealth Management at UBS – There are two types of payment models of UBS on which it relies. They are the Fee-based model and Performance or Incentive-based model.

The fee-based model of UBS can be considered to be one of the ideal payment models as it requires a one-time fee instead of commissions.

The performance/incentive-based model requires a fixed commission or fee based on the client’s assets under management. The capital manager also charges a percentage based on the growth of the client’s wealth. However, if the capital manager fails in the process, the manager will not be able to charge the commission.

The fees are to be paid on a quarterly basis. There also exists an annual fee, for which the maximum limit is 2.5% of the assets managed.

The maximum annual commission of the UBS advice portfolio program is 0.75% of the assets under management.

UBS in Monaco – UBS has been operating in Monaco for more than 60 years as a part of its worldwide wealth management services and has an employee count of 200 people in Monaco.

The major services offered to the customers in Monaco by UBS are ‘Wealth Management’, ‘Asset Management’ and ‘Investment Banking’. Let us take a more detailed look at these services at Monaco

Wealth Management at UBS (Monaco) – Wealth Management at UBS (Monaco) is known to be unique and one of a kind. They try to meet with the needs of a client by getting to know about their goals.

A few examples of the goals include Retirement Planning, Children’s Future, Business Growth, Family Goals, etc., which make a major impact on a person’s life. 

They also help people achieve their Sustainable Development Goals, which are aimed to prevent environmental damage, poverty and inequality. 

These are nothing but the 17 global goals set by the United Nations in order to deal with environmental, social and economic conditions.

They also provide some tools and insights, so that the client might be able to acquire the best in class services when it comes to wealth management.

Asset Management at UBS (Monaco) – When it comes to asset management, there are many options available for the investors at UBS. The Asset Management activities of UBS are done on a large scale in 22 countries. 

The investment opportunities are available in both traditional and alternative forms. Asset Management services at UBS are specialized for Institutions, Wealth Management Clients and Wholesale Intermediaries.

The range of products and services offered by UBS are Equities, Fixed Income, Hedge Funds, Liquidity & Cash Management, Multi-Assets, Real Assets, ETFs, UBS Platform Services, Sustainable Investment Opportunities and Impact Investing Opportunities.

Investment Banking at UBS (Monaco) – Along with wealth management and asset management, UBS also specializes in Investment Banking. 

Under the category of Investment Banking, UBS offers a wide range of services and products such as Bespoke Financing, Debt and equity capital markets, ESG and Sustainability Products, Global Financing, Investment research, Retail Investment Products, etc.

What is Sustainable Investing? – The process of making an investment, which won’t be causing any type of damage to the environment/improves the economic conditions/eradicates global problems, is known as Sustainable Investing.

In general terms, it is nothing but investing for returns without affecting your personal values, ethics and morals. 

This can be done in many ways such as Socially Responsible Investments, ESG funds, Ethical investments, etc.

At UBS (Monaco), 65% of investors are involved in Sustainable Investing and around 54% of those clients have $50million or more worth of assets in Sustainable Investing.

The sustainable investment assets under management at UBS are $488 billion as of 2019.

Protection of Assets at UBS (Monaco) – If there were ever a situation to occur, such as failure of the bank, clients will be offered protection and compensation from the ‘Deposit Insurance – FGDR (Fonds de Garantie des Dépôts et de Résolution)’.

FDGR also has the right of interfering before there happens any sort of bankruptcy, in order to safeguard the customers.

Tips while picking a wealth manager – There are some useful tips given below, with the help of which individuals might be able to pick the right type of wealth manager that suits their needs.

However, all wealth management firms are not similar as some specialize in a few categories, whereas, some specialize in all categories of wealth management.

• Wealth Managers, most of the time, tend to work with the individuals who either have an ultra-high net worth or possess wealthy assets.
  
  However, some wealth managers choose to work with individuals having even as low as $50,000 to $500,000. Therefore, it is wise to choose the wealth manager that can cater to your needs and financial goals.

• If you are searching for a nice wealth manager, you might be clear by now about the specific services you require. It is better to check what types of products and services are provided by the wealth manager you choose.
  
  Make sure that the services and products provided by the wealth manager are useful for your financial goals, therefore, making you achieve them.

• Check for the fees and charges that a wealth manager can impose on the individuals. It is the most important thing to consider as high charges might result in a decrease in the returns from the assets.
  
  Sometimes, even if a wealth manager charges a humongous amount of fees, the services offered might be worthy of it. Therefore, it is better to conduct research on this topic before itself.

• Get familiar with the availability of a wealth manager that they are thinking about working with. You won’t necessarily require a wealth manager to available on a daily basis as you won’t be contacting them daily, however, it is best if the wealth manager can be available to be contacted regularly.

• Know about the past performance, track record, etc., of the wealth manager so that you can have an idea about what you can expect from them.
  
  Choosing a wealth manager not so good might not only affect your financial well-being, but also the well-being of your family and future generations.

Bottom Line – UBS is known to be one of the most reputable wealth managers available in the world. They are well known for the services they provide and the products they offer. 

There are some other institutions that are known to perform better when compared to UBS. Therefore, UBS cannot be said as the best available option for the individuals, however, it cannot be considered as the worst option available either.

As for our opinion, we consider UBS (Monaco) Wealth Management services to be average or slightly above average.

In order to obtain the wealth management services, people would also require other types of professional services as discussed earlier in the article. 

Therefore, it is highly suggested that only the individuals who are able to bear the amount of fees and charges that can occur should proceed to acquire wealth management advisory.

In the case of Investment advice or handling/assistance with the portfolio, we highly recommend that customers should only opt for the asset management services in order to prevent unnecessary costs.

If you are a person that is entirely new to this field and require information about this topic, or you require the services of a professional financial advisor in order to handle all these activities, you can avail of the expert services offered by us.

We can also provide some low-cost wealth management alternatives, investment advice and other types of financial solutions as well.


Further Reading: Hansard International Vantage Platinum II Review examines premium wealth management solutions, similar to UBS Monaco’s tailored services.