Switzerland’s UBS Buying Wealthfront for $1.4B

Swiss Bank UBS will purchase wealth management firm Wealthfront in an all-cash deal the companies say is worth $1.4 billion.

As Reuters reported Wednesday (Jan. 26), the acquisition of Wealthfront — which has more than 470,000 clients in the U.S. and more than $27 billion in assets under management — is due to close in the second half of the year. UBS says it will finance the deal with excess capital.

“UBS will accelerate its growth ambitions in the U.S., broaden the firm’s reach among affluent investors and expand its distribution and capabilities,” the two companies said in a statement.

When the deal concludes, Wealthfront will become a wholly owned subsidiary of UBS, operating as part of UBS Global Wealth Management Americas.

“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.,” UBS CEO Ralph Hamers said in an announcement.

Becoming part of UBS will let Wealthfront provide its clients additional services and research, its CEO David Fortunato said, adding, “We couldn’t be more excited to have found a strategic partner who has the same view on the power of technology.”

Reuters notes that UBS had said last year it wanted to create a digitally scalable advice model for clients in the Americas with at least to $2 million to invest.

Read more: Swiss Bank UBS Takes Appeal of Money Laundering Verdict to French Supreme Court

Last year saw UBS file an appeal over a French court ruling upholding the bank’s conviction for money laundering. The decision also cut the penalty for allegedly helping wealthy clients evade taxes. Switzerland’s biggest bank said the decision “enables UBS AG to thoroughly assess the verdict of the Court of Appeal and to determine next steps in the best interest of its stakeholders.”

The French court said that UBS would face a penalty of 1.8 billion euros, much lower than the 4.5 billion euros initially imposed in 2019.