UBS’s plan to target the rich US clients and recruit others through a digital service could weaken its bargaining power, according to Reuters.

UBS Global Wealth Management Pre-Tax Earnings in the Third Quarter
  • The analysts warn that UBS is not the only bank to target rich Americans for an online offering, with banks such as Morgan Stanley, JPMorgan, and Goldman Sachs leading the pack.
  • The analysts say UBS could copy established rival models such as acquiring an E-Trade rival. They warn that UBS could be forced to sell its US unit to rivals if it doesn’t go big, which means retreating from the huge wealth management market.
  • UBS will target America’s affluent clients with assets worth $250,000 to $2 million through a mobile app. The bank also aims to offer more business loans and mortgages to wealthy customers through its network of financial advisers.

UBS wealth management division is one of the least profitable in America, with a pre-tax profit margin of only 20% reported in the third quarter. 

UBSG: SWX is up +0.21%.