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How UBS built its digital financial management service SmartWealth 'like a startup'

Scott Carey | Aug. 11, 2017
How two people within UBS pitched the robo-advice business for seed capital and built a digital wealth management service from scratch in just twelve months.

"Once you are in you are in the largest wealth manager in the world and they are managing your wealth like they would do for everyone else. That is a big difference compared to others."

In short though, SmartWealth invests your money in a range of funds composed of liquidity, bonds and equities, both within a tax-free ISA wrapper and as taxable core investments.

Users are then charged an annual advisory account fee, which ranges from 0.25% for investments below £100,000, to 0.15% for between £100,000 and £250,000, and 0.1% for anything above £250,000.

You will also be charged On-going Charges Figures (OCF) which include the costs of the fund itself and will vary depending on the funds themselves. 

You can then enter financial goals, like your children's education, buying a second home, a dream car, and check in on the app to see how your investments are tracking, on desktop, mobile or tablet.

 

Competitors

UBS launched SmartWealth in the UK because of "a progressive regulator, high digital affinity with financial products and the talent for development in London", Williams said.

UBS plans to expand the service internationally from day one, but the next locale has yet to be decided. "We are going through an exercise of planning where to go next but nothing has been decided. We knew that would be the case from the beginning so before the first line of code we knew it had to be multi-language entity, multitenancy platform," he said.

SmartWealth is unique in that it is entering a market where the incumbents are pretty much all startups. Here in the UK the major names in the robo-advice world are Nutmeg, Wealthify, Moneyfarm and Moneybox.

A key difference is that SmartWealth actually provides advice, and redress if it doesn't go well. Competing robo-advisors are discretionary services that manage a user's money for them.

Where UBS can make SmartWealth stand out is off the back of its trusted brand. "So startups have that speed but they don't have the brand, so the cost of acquisition is a big problem, which is why a lot of the VC capital is spent on marketing and brand building," Williams said.

And when asked if having the financial cloud of UBS -- with around £757 billion in assets -- behind him gives them an advantage over its rivals, Williams was bullish: "To be honest if I look at some of the venture capital figures the startups get, I am rather jealous of them. Look at how much Nutmeg have to work with [nearly £70 million to date].

"There is always that perception that the big companies have the biggest resources, but it is probably not exactly the way it is in reality."

 

 

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