Wealth Management Wisdom from UBS's Rosemary Berkery

Swiss investment bank UBS, the world's largest manager of assets for the wealthy, has spent the past three years carefully expanding onto U.S. retail banks' traditional turf, introducing new credit cards and mortgages for its wealthy customers. In a recent interview, Rosemary Berkery, vice chairman of UBS Wealth Management Americas and head of its U.S. bank, shared what she's learned about U.S. retail banking and how it complements banks' wealth-management goals.

(Image: Bloomberg News)

Beat Back the Competition Beat Back the Competition "You want to be the one talking to your client about their mortgage, [because] if you're not having the conversation with them and solving for their mortgage needs, the odds are that one of these other big banks is," Berkery says.

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Play to Your Strengths Play to Your Strengths UBS applied for a bank charter in 2003 but has resisted expanding beyond its core business; it offers mortgages, credit cards and securities-based personal loans to its existing wealth-management customers, not to the broader market.

(Image: Bloomberg News)

The Wealthy Want Different Things from Banks The Wealthy Want Different Things from Banks Berkery dismisses the mounting competition from retail banks that are expanding their wealth-management services.

"There are some banks that are trying to get into this business by populating their commercial branches with individuals who can both lend and advise on securities, who are dually registered," she says. "I have conversations with clients all the time that say, 'We're not going to talk to them about our family trust that holds $100 million for the benefit of our children.'"

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Control Your Own Credit Card Control Your Own Credit Card When Berkery joined UBS three years ago, it already offered a credit card to U.S. customers but that card was issued and managed by Barclays, and UBS had little control over its cardholders' experiences. In the wake of the financial crisis, most banks were pulling back on risk, and Barclays executives "had turned their fraud and risk tolerance down to zero, so you'd be stopped at every cash register," Berkery says. "We actually had clients who were stopped 90% of the time" from using their cards. She has since brought the UBS credit card in-house.

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Everyone Likes a Discount Everyone Likes a Discount Berkery built up UBS' mortgage business from scratch by hiring Frank Destra, formerly Goldman Sachs' (GS) head of residential lending, and by offering existing customers discounts on their mortgage rates if they retain certain assets at the bank or bring them there when applying. Now 26% of the company's financial advisors have sold a home loan to existing customers within the past 12 months, she says.

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Keep Your Customers Close Keep Your Customers Close "Clients who bank with us, meaning they do a certain amount of direct deposit or mortgage or card transactions with us, are three times less likely to leave than those who don't," Berkery says.

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Be Careful About Crossing Regulators' $50 Billion Line Be Careful About Crossing Regulators' $50 Billion Line Berkery has almost doubled the size of UBS Bank USA's assets, to $47 billion this March from $29 billion three years earlier, according to FDIC data. The question now is "whether or not this should become a $50 billion-plus bank," which would make it subject to additional capital requirements and other regulations, she says.

"The $50 billion line is a very bright line. If you're going to make that leap, you want to do it deliberately and with a lot of forethought."

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Swiss investment bank UBS, the world's largest manager of assets for the wealthy, has spent the past three years carefully expanding onto U.S. retail banks' traditional turf, introducing new credit cards and mortgages for its wealthy customers. In a recent interview, Rosemary Berkery, vice chairman of UBS Wealth Management Americas and head of its U.S. bank, shared what she's learned about U.S. retail banking and how it complements banks' wealth-management goals.

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