California Still Shines Bright For UBS

Tom Burroughes

5 November 2021

While not all the headlines about California have been positive recently, the home of Hollywood, Silicon Valley, wine producing powerhouses such as Napa, tourism and agriculture has a lot of wealth-creating power. And, as far as UBS is concerned, it makes sense to continue building out teams to serve high net worth and ultra-HNW clients on the ground.

UBS has been hiring advisors in locations such as Newport Beach, Orange County and Santa Barbara, as reported here, here and here. Separately, other firms such as Rockefeller Capital Management and Robertson Stephens have been active, among others .

With all this activity, this news service decided to quiz Justin Frame, Los Angeles and Orange County market head at UBS Wealth Management USA about the Swiss firm’s strategy for this part of the West Coast. And the comments came a few weeks after the Zurich-listed group reported its third-quarter results, showing that the wealth arm logged double-digit pre-tax profit growth in all regions. Within the Americas specifically , UBS said that pre-tax profit rose to $559 million in Q3 2021, up $188 million on a year earlier; the cost/income ratio narrowed to 79.8 per cent, and fee-generating assets rose to $848 billion, helped by $11.8 billion of inflows during the period. As for California specifically, UBS operates in a state that is home to 39 million people and a $2.8 trillion gross domestic product .

Frame and his colleagues seem to be enjoying forward momentum.

“Newport Beach, and the entirety of Orange County, is a tremendous market for us. The growth of wealth, appreciation of real estate, and enterprise have created a substantial opportunity for us to serve the community. Real estate in Orange County is up a staggering 8.6 per cent year-over-year,” Frame said, citing data from realtor.com. “This creates a need for the lending and planning that our advisors bring to their clients. We have also seen substantial M&A and other capital market activity, which has created liquidity events that our advisors are well suited to work with clients on.”

California is home to many big sources of wealth . What's your general view of where the state is headed as a place in which to do business? Will the pipeline of future HNW individuals remain strong, in your view?

“Despite some of the issues California has had it will remain the home to many successful people. It’s important to remember that if California was a country, it would be the world’s fifth largest economy and thus faces many of the challenges that other large countries face. It will continue to be a wonderful place to live and do business – it has a diverse population, great education opportunities, and a beautiful geography,” he said.

In five years' time, where would UBS like the business to be in this part of the state?

“Stronger than ever, and I feel it will be. We have seen some migration from the tech dominated Northern California, and I think that will continue. I also could see the return of some individuals who have left the state for tax reasons. A season or two of scooping snow in other states may changes some minds! I grew up in Colorado, so have first-hand experience with that,” Frame said.

We asked Frame to talk about the work with clients looking to build family offices.

“Yes, we work with individual and institutional clients looking to do this and UBS is well-positioned for that demand. For example, we have a department in the firm that our advisors can leverage called the Family Office Solutions Group. This team provides content, solutions, planning strategies and structures that large families use; often in lieu of setting up their own family office where there can be tremendous additional costs,” Frame added.