UBS Terminates $1.4Bn Deal to Buy Wealthfront

UBS and Wealthfront announced Friday that they've mutually agreed to terminate their merger agreement. 

Initially announced in January of 2022, UBS Americas Inc. was to acquire Wealthfront for some $1.4 billion with the intention to expand UBS's Wealth Advice Center and Workplace Wealth Solutions business. At the time, Wealthfront had almost 500,000 clients and managed nearly $27 billion.

UBS will instead purchase a $69.7 million note convertible into Wealthfront shares. The bank said it remains committed to its growth plans in the US and will continue the build-out of its digital wealth management offering. 

In January, UBS executives said the acquisition was meant to bring more young, wealthy clients to the Swiss-based bank's U.S. wealth management division.

"Adding Wealthfront's capabilities and client base to our global investment ecosystem will significantly boost our ability to grow our business in the U.S.," CEO Ralph Hamers said in the statement announcing the acquisition. It "will enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors."

Wealthfront, one of the original robo-advisors, was founded in 2008. Unlike competitor Betterment, Wealthfront continued to shun the idea of adding or working with human advisors, insisting that an all-digital automated advice and investment platform was the future of the industry.

UBS has some 6,000 financial advisors in the U.S., and in January Hamers said he envisioned Wealthfront as the basis for a digital platform for clients that would also include access to human advisors.

(Source: Wealth Management)