Under that agreement, the Swiss bank was to buy Wealthfront. Instead, UBS will purchase a $69.7 million note convertible into Wealthfront shares, it said in a statement issued late on Friday.

UBS said in a statement that it “remains committed to its growth plans in the US and will continue the build-out of its digital wealth management offering.” However, the statement did not elaborate on why the agreement had been axed. A spokesperson for UBS declined to comment when asked by Family Wealth Report about the matter.

In its January announcement, UBS said that the deal would have enabled it to accelerate growth in the US and widen its appeal to affluent investors. The bank had said that Wealthfront would have expanded its existing offering through the firm’s Wealth Advice Center, which focuses on serving core affluent clients, and its Workplace Wealth Solutions business, which works with employees of corporate clients on equity plan participation, financial education and retirement programs.

When the Wealthfront deal was initially announced, it was seen as a sign of the Swiss firm's push into the US mass-affluent space, putting itself up against rivals such as Merrill and Morgan Stanley. Yet the Wealthfront move was ironic because in 2018 UBS sold its SmartWealth business to US-based online investment advisor SigFig. At the time it appeared that the bank had pulled out of moving into such a channel.

The abandonment of the merger may be seen as a setback for Ralph Hamers, the UBS chief executive, who joined in 2020 from ING. With his reputation for pushing the Dutch group toward a more digital approach, he was expected to repeat this process at UBS.