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Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
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Go deeper on emerging topics, as well as key firms and thought leaders
A deep dive into how advisors can best serve the evolving needs of their wealthiest clients
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Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
Popular Financial Topics
Go deeper on emerging topics, as well as key firms and thought leaders
A deep dive into how advisors can best serve the evolving needs of their wealthiest clients
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Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
Popular Financial Topics
Go deeper on emerging topics, as well as key firms and thought leaders
A deep dive into how advisors can best serve the evolving needs of their wealthiest clients
Tax Facts
Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
Popular Financial Topics
Go deeper on emerging topics, as well as key firms and thought leaders
A deep dive into how advisors can best serve the evolving needs of their wealthiest clients
Tax Facts
Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
Popular Financial Topics
Go deeper on emerging topics, as well as key firms and thought leaders
A deep dive into how advisors can best serve the evolving needs of their wealthiest clients
Tax Facts
Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
Popular Financial Topics
Go deeper on emerging topics, as well as key firms and thought leaders
By Janet Levaux
September 02, 2022 at 04:47 PM
Some seven months after UBS Group AG agreed to buy robo advisor Wealthfront for $1.4 billion, the two firms now say they have “mutually agreed to terminate their merger agreement,” according to a statement.
UBS will, however, buy a $69.7 million note that is convertible into Wealthfront shares.
“UBS remains committed to its growth plans in the U.S. and will continue the build-out of its digital wealth management offering,” it explained in a press release late Friday.
When the deal was announced on Jan. 26, Wealthfront had some $27 billion in assets under management and over 470,000 clients in the U.S.
In his analysis earlier this year, Nexus Strategist President and CEO Tim Welsh concluded that the average level of assets per client account was about $57,000. “Wealthfront’s pricing schedule of 25 basis points (the first $10,000 being ‘free’) means that UBS is paying $3,000 for just $117 of annual recurring revenue (ARR), which is problematic when looked at on an ROI basis,” he explained in a column for ThinkAdvisor.
Late Friday, Wealthfront CEO David Fortunato said in a statement: “Today we announced that together with UBS we decided to terminate our pending acquisition and will instead remain an independent company.”
“I am incredibly excited about Wealthfront’s path forward as an independent company and am proud to share that thanks to the hard work of our team and the trust you put in us, we will be cash flow positive and EBITDA profitable in the next few months,” Fortunato explained.
The news about the cancelled Wealthfront deal comes four years after UBS shut down SmartWealth, a digital wealth management platform. In August 2018, UBS sold the technology to robo-advisor SigFig, which the Swiss-based bank had invested in two years earlier.
In late July, UBS Group AG missed analysts’ estimates and reported a net profit of $2.108 billion in the second quarter, which was up from the roughly $2 billion it earned in the year-ago period. Revenues were $8.92 billion vs. $8.90 billion a year earlier.
“The second quarter was one of the most challenging periods for investors in the last 10 years, said CEO Ralph Hamers said in a statement at the time.
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