UBS launchs a new robo-advisor service in UK

UBS will launch a new robo-advisor service in the UK on November 21. The launch is part of a $1bn initiative to attract younger clients, with the firm’s wealth management business planning a follow-up advertising campaign in 2017. The Swiss bank will keep the minimum investment required for the new service to £15,000, while it  usually requirs £2m to open a private bank account.

The service will ask automated questions to clients and recommend a portfolio of investments based on their answers. The company is said to believe that this launch will help broaden its service offerings, which were earlier restricted to the richest of people only.

UBS will charge a fee of about 1.7% on assets for an actively managed portfolio and about 1% for a passive strategy, or one that mirrors market indices.

Dirk Klee, COO at UBS Wealth Management said, "Robo-advice represents the democratisation of wealth management." In terms of differentiation of its service from others, he said that UBS did not intend to compete with other robo-advisers purely on price but instead offer a more sophisticated interactive service that would allow its clients to invest for the future.

The Swiss company is not the first to introduce such a service. RBS had in March said that it would axe 550 staff and replace them with 'robo-advisers'. Then, also, BlackRock, Vanguard and Goldman Sachs are known to have recently developed similar online investment services.

UBS plans to extend the robo-advisor service to other parts of the world, starting in 2017 with Europe and Asia.