(Bloomberg) — UBS Group AG has agreed to buy US robo advisor Wealthfront for $1.4 billion in cash, the first major acquisition by a fintech company under Chief Executive Officer Ralph Hammer.
Switzerland’s largest bank said in a statement late Wednesday that the deal would add more than $27 billion in assets under management and more than 470,000 customers in the US. The transaction is expected to close in the second half of this year.
“Adding Wealthfront’s capabilities and customer base to our global investment ecosystem will significantly enhance our ability to grow our business in the US,” Hammers said in the statement. This will “enhance our long-term ambition to deliver a scalable, digital-led wealth management solution to affluent investors.”
Hammer, a former executive at ING Group NV, has pledged to use more technology to win more customers and streamline services for the world’s rich. Launched in 2008, Wealthfront was one of the first so-called robo-advisors, or money managers, who rely on apps that charge low fees and use algorithms to make trading decisions.
These upstarts have further fueled the wealth and asset-management industries by displacing active managers who rely on their expertise to make money. Investment giants such as Charles Schwab Corp. And brokerages including Morgan Stanley have since forayed into the space.
Statement link: UBS Millennials and Gen Z agree to acquire Wealthfront to offer digital wealth management to affluent investors