UBS chairman Axel Weber has, reportedly, said the wealth management industry is experiencing a ‘challenging environment’ as clients remain reluctant to invest on a large scale.
Weber said in the interview with Bloomberg Television that he expects periods of "risk-on risk-off" in the markets to continue.
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"Our clients haven’t really made a big move to be back in the market and that’s why it’s still a challenging environment," Weber toldBloomberg Television.
Profitability at UBS’s wealth management unit, which oversees assets of US$865.6 billion outside of the Americas, has been under pressure as clients prefer to hold cash rather than invest the money. At the end of 2012, 28% of the assets managed on an advisory basis were in cash, chief financial officer, Tom Naratil, said in February.
The gross margin at the wealth management division fell to 85 basis points in the fourth quarter from 88 basis points in the third.
UBS said, in presenting second-quarter results when almost 31% of advisory assets were in cash, that it would expect to see a 6 basis-point boost to gross margins from a "modest return of client risk appetite." The bank is targeting gross margins of 95 basis points to 105 basis points.
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