UBS tailors advisor tools for minority clients with $1M+

One of the largest wealth managers is trying to engage a client segment spanning as many as 2 million people who are part of groups that have historically been excluded by the industry.

Launched on Jan. 25, The UBS Wealth Management USA Multicultural Investors Strategic Client Segment is offering the firm’s roughly 6,200 financial advisors research, access to new racial equity investing products and discussion guides for prospects who are Black, Latino or Asian American and have at least $1 million in investable assets. The new program joins existing ones aimed at women, business owners, rising generations, and athletes and entertainers, said Melinda Hightower, the head of the new client segment.

It comes as large wealth managers, advisors and academic researchers seek more information about affluent and high net worth clients from underrepresented groups. In some cases, the potential clients may not even be aware of investment opportunities that could build generational wealth. The barriers to accessing them include the industry’s lack of representation of women and minorities as well as outright racist actions or company-wide practices.

UBS

Many of the new programs launched over the past couple of years in wealth management have revolved around philanthropy or trying to reach new groups of clients through the “same way of doing business,” said Hightower.

“Inclusion was certainly not central to that experience, and they're just going to the new audience and saying, ‘Here we are.’ So you're getting a bunch of ill-fitting products,” she said in an interview. “We are thinking that the change has to happen within the way that we offer investment advice, and so that's what we're critically focused on.”

Hightower said more information would be available in coming months about the racial equity investing products coming to UBS, along with insights from polling her team has conducted with the client segment it estimates to be between 1 million and 2 million Americans. The team will supply educational resources to advisors focused on topics such as linking portfolios to a legacy beyond one’s immediate family and the central importance of building generational wealth. The company aims to expand discussions during client meetings and prompt advisors to ask about legacy specifically, according to Hightower, who said that “preserving generational wealth” and preparing young people for that transfer are the clients’ main financial goals.

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While driving change in wealth management over the long term will take time, it’s possible if client-facing advisors in branches take steps within their practices while executives closely examine what their companies could be doing as an organization, said Dana Wilson, CEO of Changing How Individuals Prosper (CHIP), a financial services marketplace for Black and Latino professionals and prospective clients. The company recently launched its own quarterly magazine as part of its efforts to increase the visibility of minority advisors and clients. There are “always a lot of missed opportunities in that stereotype” when firms or advisors assume that working with Black and Latino clients means lower account sizes, Wilson said.

“It’s not that people don't have money. We have it, we just haven't had the access and the opportunity to be able to have those conversations and to be able to have it make sense to our lives,” Wilson said. “It’s a nice thing to walk into a room and say, ‘Oh, here's something that's for me. … It’s really just about changing the dynamics and breaking down some of those barriers.”

Wilson praised the choice of Hightower to lead the outreach to the client segment at UBS, where Hightower says some advisors are already tapping into it effectively and participating in her team’s research for other planners. A former private banker with J.P. Morgan Chase who served clients that are part of the segment, Hightower argues that advisors of all backgrounds can make the experience better for any client by seeking more engagement beyond their traditional base. The company’s goal isn’t to build a silo for certain people, she said.

“It's something that's important to anyone for whom inclusion is important,” Hightower said. “In order to remain relevant, financial institutions should really take note and work to be as inclusive as possible.”