UBS Buys Wealthfront

UBS Group AG is buying online wealth adviser Wealthfront for $1.4 billion to reach the young rich and manage more money for people through their devices, according to a story in The Wall Street Journal. UBS said it would pay cash for the digital platform, one in a clutch of startups whose assets have grown rapidly in an industry shift to automated advice. California-based Wealthfront has $27 billion under management for nearly half a million clients. UBS Americas president Tom Naratil said the Wealthfront purchase further sets out UBS’s ambition to bring in more wealthy U.S. customers, especially millennial and Gen Z investors. For many of them, digital advice, rather than an old-fashioned broker relationship, is the preferred option, he said. Mr. Naratil said the bank has to consider whether it is “positioned properly, for those who don’t necessarily think the traditional financial adviser model is the right one for them.” UBS gets most of its wealth clients in the U.S. through a 6,000-strong army of financial advisers. Giving digital advice is cheaper, and should improve profit margins, UBS executives have said.