The Wealthfront UBS partnership is a significant development in the financial industry. Wealthfront, a leading robo-advisor, has partnered with UBS, a global financial services company, to offer its clients access to UBS's investment products and expertise.
This partnership aims to provide Wealthfront clients with a more comprehensive investment experience, including access to UBS's global investment platform and research capabilities. Wealthfront's clients will now be able to invest in a broader range of assets, including UBS's mutual funds and exchange-traded funds (ETFs).
Wealthfront's users can expect to see a more streamlined investment process, with the ability to easily transfer their existing investments to the new platform. This integration will also enable more efficient portfolio management and monitoring, thanks to UBS's advanced investment tools and research capabilities.
The partnership will also offer Wealthfront clients access to UBS's global investment expertise, with the ability to invest in international markets and assets.
Additional reading: Ubs Financial Results
UBS Milestone
In 2019, UBS acquired Wealthfront's competitor, Swiss-based money manager, for a reported $3.2 billion.
Wealthfront and UBS have a long-standing partnership that dates back to 2015, with UBS serving as the custodian for Wealthfront's clients.
UBS has been a major player in the wealth management industry for over 150 years.
Their acquisition of the Swiss-based money manager marked a significant milestone in UBS's expansion into the digital wealth management space.
This partnership has allowed Wealthfront to leverage UBS's expertise and resources to provide its clients with more comprehensive and diversified investment options.
As of 2020, UBS had over $2 trillion in assets under management worldwide.
Additional reading: Asset Management Ubs
Inside the Numbers
Wealthfront has over $27 billion in assets under management, which is a staggering number.
The company charges a 0.25% fee for managed assets, which is a relatively low fee compared to other robo-advisors.
Wealthfront likely generates annual revenue of around $67.5 million, which is a significant amount considering its AUM.
At $1.4 billion in AUM and a presumed run rate of around $67 million, Wealthfront is being sold for around 21x its current yearly revenue base.
Discover more: Ubs Revenue
This multiple is a SaaS-style multiple, which is impressive given the lower gross margins and less net-dollar retention of robo-advisors compared to B2B software companies.
Wealthfront has 470,000 clients in the U.S., which is a huge customer base that UBS is buying for $1.4 billion.
The exit price of $1.4 billion may seem expensive, but with the continuing revenue results that Wealthfront is putting up, it may be a number that is not exorbitant.
Recommended read: Ubs Mini B
Frequently Asked Questions
Why did the UBS cancel Wealthfront?
UBS canceled its deal to acquire Wealthfront due to concerns that the $1.4 billion price tag was too high, amid declining tech valuations and worsening forecasts for robo-advisors. This led UBS to reconsider its expansion plans into the US and wealth management market.
Who is the parent company of Wealthfront?
Wealthfront is a subsidiary of UBS, acquired in January 2022 for $1.4 billion. UBS is the parent company of Wealthfront.
Sources
- https://www.bankrate.com/investing/ubs-acquires-robo-advisor-wealthfront/
- https://fintechnews.ch/roboadvisor_onlinewealth/ubs-roboadvisor-wealthfront-announces-50-billion-aum-milestone/64760/
- https://www.emarketer.com/content/collapsed-wealthfront-deal-ubs
- https://techcrunch.com/2022/01/26/unpacking-the-ubs-wealthfront-deal/
- https://www.thinkadvisor.com/2022/03/04/why-wealthfront-sold-out-to-ubs/
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