This time last year, UBS was embarking on its takeover of the distressed Credit Suisse. Understandably, this slowed its pursuit of other M&A targets. However, the bank is now ready to target larger wealth management firms.

UBS CEO Sergio P. Ermotti recently spoke at the Morgan Stanley European Financials conference. He sees the bank targeting US wealth managers for acquisitions in an effort to boost the profitability of this division. His goal is to narrow the gap between UBS and its rivals following a 72% decline in the unit’s Q4 earnings. 

However, many are skeptical about UBS’ strategy given the aggressive moves made by competitors in the last few years. According to Larry Roth, the managing partner at RLR Strategic Partner, “UBS could be late to the M&A party, which already has significant, well-run firms that are having success in this area.” Further, attractive targets are likely to have multiple bidders and rich valuations. 

Another concern is that there is no guarantee that these large acquisitions will work. A recent example is UBS’ attempted purchase of Wealthfront for $1.4 billion in January 2022 with the intention that it could help the bank recruit Wealthfront’s younger clients. The deal was scrapped by regulators and shareholders. 

Acquisitions are essential for UBS to fuel growth, given its challenges in retaining talent. UBS's advisors generate more than $1 million in average annual revenue and fees. This makes them an appealing target for RIAs or independent broker-dealers with more earnings potential. 

Finsum: UBS is betting on a more aggressive M&A strategy to bolster its US wealth management division. Yet, many believe that the bank’s efforts may not succeed given higher valuations for attractive targets and recruiting challenges.

Navigating social media poses considerable challenges for financial advisors, firm executives, and other professionals, where every post and interaction can potentially impact their professional reputation. However, there's a new strategy emerging, emphasizing the importance of prioritizing the personal aspect first, according to April Rudin, founder and CEO of The Rudin Group.

 This shift represents a departure from previous conventions that primarily emphasized showcasing professional backgrounds. Rudin suggests that delving into personal beliefs, passions, and backgrounds can serve as effective conversation starters and entry points for new business opportunities and recruitment efforts. 

While maintaining professionalism remains paramount, there's an increasing recognition of the value in showcasing one's personality and individuality within the confines of firm guidelines. As social media continues to play an integral role in professional networking and client engagement, Rudin's advice underscores the importance of authenticity and human connection in the digital realm.

Finsum: Standing out in a world of increased AI and robo advisors could mean putting more personality into your practice. 

The traditional perspective on direct indexing as solely an equity investing strategy is shifting, as highlighted by Jonathan Rocafort from Parametric Portfolio Associates, who advocates for its exploration in fixed income portfolios. 

Customized and tax-aware bond ladders present an intriguing opportunity, particularly for advisors with clients nearing retirement. While advisors are well-versed in tax-loss harvesting for equities, Rocafort notes a knowledge gap regarding tax-aware bond investing and the potential for tailored retirement income portfolios at scale. 

Direct indexing in equities involves purchasing individual stocks from an index, enabling tax optimization and customization beyond traditional funds. Similarly, managers can offer customizable bond ladders in municipal, corporate, or Treasury bonds, aligning with investors' values and tax strategies. Despite uncertainty in the interest rate cycle, there's optimism about utilizing fixed income strategies like bond ladders amid potential rate hikes in tax strategies.

Finsum: While it is still not the cheapest strategy, direct indexing could prove useful for HNW clients utilizing bonds as they near retirement.