UBS’s US wealth-management business is partnering with the San Francisco-based robo-adviser SigFig.
Robo-advisers use software to make investment-allocation decisions, and SigFig will develop “digital tools” to be used by UBS’s 7,000 financial advisers.
The Swiss bank is also making a direct investment in the startup.
Tom Naratil, president of UBS Americas, told Business Insider:
We saw it as a great opportunity to marry the best technology that we thought the robo-advisers made – which is something we didn’t think we could replicate ourselves – with the strength that we really have from our end, which is the quality and the depth and the longevity of the relationships that we have with our clients.
And when it comes to tech investments for the Wall Street firm, this may just be the beginning. UBS is interested in partnering with other companies in the tech space, Naratil said.
“Across UBS, globally, we certainly are focused on technology and making significant investments in technology to improve productivity,” he said.
Before deciding on the partnership, Naratil spent time with a number of robo-advisers and other financial-technology companies in Silicon Valley. He was drawn to SigFig because of its technology and management team, he said.
We found they could deliver the technology that we wanted faster and cheaper than we could do it by ourselves. As a firm I’d say that’s the profile we’re looking for: Where can we find a third party that can deliver the ability to get us up and running more quickly and also to do so at a cost point that’s more attractive?
Naratil said that UBS is not looking to partner with any more robo-advisers right now.
But he said:
In technology overall, with other types of capabilities or tools or needs, this is the type of commercial arrangement that we’d look for, where we’d want to see someone who could deliver us better technology than we could develop ourselves, more quickly than we could on our own, and at a price point that’s more competitive than the one we could deliver.