UBS: Finding balance between old and new

While there are several new-style products, including hedge funds, which have emerged as a key part of private clients’ needs, a careful balance must be maintained. Client advisers need to determine a customer’s risk profile, philosophy and lifestyle choices so that a suitable portfolio can be constructed, according to Hansjoerg Borutta of Investment Solutions, the UBS Wealth Management unit in Zurich responsible for product selection.

“Today the number of investment products has increased dramatically,” says Mr Borutta, whose customers have more than $1100bn (e900bn) in invested assets. “Hedge funds have become a normal staple. They are now a default offering in our programmes.”

While 350 mutual funds from a 30,000-strong universe are actively recommended to clients, the more conservative are typically guided into internally-manufactured strategies.

The UBS approach is not to provide a list of funds, but to propose portfolios of funds, which work well together. External fund groups are assessed, and can be invited into global distribution agreements, so that their products can be provided for UBS Wealth Management’s offices in Spain, Italy, France, Germany and the UK, as well as Switzerland.

“But having a distribution agreement does not mean all instruments a group can provide are approved by us,” warns Mr Borutta. “It is not our intention to share a complete programme.”

In-house funds are subjected to the same due diligence process. “With standard fixed income exposure, most clients go for UBS products, because we have strong expertise in-house,” adds Mr Borutta.

Yuri Bender

Borutta: “hedge funds are a normal staple”