BYE BYE: UBS and Wealthfront Agree to Kill Merger Agreement
Posted on 09/03/2022
UBS and robo-adviser Wealthfront Inc. have mutually agreed to terminate their US$ 1.4 billion merger agreement, initially announced January 26, 2022, under which Wealthfront was to be acquired by UBS Americas Inc.
UBS will purchase a US$ 69.7 million note 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. At that point in time during the deal, Wealthfront had around US$ 27 billion in assets under management and over 470,000 clients in the U.S. Doing some basic math that is around on average US$ 57,000 per client account. Wealthfront’s pricing schedule of 25 basis points and the first US$ 10,000 being “free” meant that UBS was paying a lot of just a small fraction of annual recurring AUM revenue. UBS Wealth USA had its own digital finanical advice offering through SigFig Wealth Management.
Keywords: UBS Group AG.
