UBS <UBSG.S> is closing its British digital wealth management platform and selling the intellectual property rights to wealth management startup SigFig, executives at the Swiss bank told staff on August 29.
UBS decided to discontinue the SmartWealth pilot program, launched in Britain in early 2017, following a review that found the limited short-term potential for the service, according to an internal memo seen by Reuters.
The contents of the memo were confirmed by UBS.
“While we were satisfied with the initial commercial progress, at this time we believe the near-term potential is limited and have therefore decided to close our digital-only offering in the UK,” Eva Lindholm, head of Wealth Management UK, and Reto Wangler, chief operating officer of Global Wealth Management, said in the memo.
“We’re pleased, however, to have entered into an agreement to sell the intellectual property relating to UBS SmartWealth to SigFig – a financial technology firm that we have an equity stake in and with whom we’ve been working for two years in the U.S.,” the memo added.
Clients would be informed during the course of the day, Lindholm and Wangler said.
The sale was reported by Citywire earlier on August 29.
The launch of the pilot program, which provided digital real-time advice to customers with a minimum of 15,000 pounds ($19,300) to invest, marked a foray into a far broader clientele for the world’s biggest private bank, which counts millionaires and billionaires amongst its wealth management customers.
The bank was considering a wider rollout of the program as recently as December last year.
However, following a wealth management reorganization under which its North American and international businesses were folded into one global unit, prompting senior management changes, the bank decided to invest resources elsewhere.
Founded in 2007, SigFig sells software to large financial institutions to enable them to offer new digital services such as automated wealth management, known as robo-advice. It also provides robo-advice directly to consumers.
Financial terms of the deal were not disclosed.
($1 = 0.7769 pounds)
By Brenna Hughes Neghaiwi.