UBS is reportedly preparing to wind down its fund sales operation in China after failing to win enough investors in a market crowded with domestic competitors.
The Swiss bank set up the Shenzhen unit in late 2022 and aimed it at wealthy Chinese clients through the digital wealth platform WE.UBS.
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In a statement to Reuters, UBS said the fund sales business would stop operating at the end of September.
The decision to shut the unit has not previously been reported.
According to sources cited by the news agency, UBS found it difficult to expand WE.UBS in China’s mutual fund distribution market.
The platform was competing with nearly 400 rivals, while also facing overlap with other UBS operations.
One of the sources said UBS is discussing plans to rename WE.UBS and place it within its China securities unit.
Another person said UBS already holds fund sales licences through its China securities and banking businesses, making it difficult to justify three wealth management platforms in the country competing for the same internal resources.
UBS told Reuters that its other wealth management platforms in China continue to operate normally and that resources linked to the closing unit would be integrated elsewhere.
WE.UBS had faced difficulties from the outset because the fund sales market is dominated by local competitors.
The platform never entered the top 100 ranking published by China’s fund industry association.
One of the sources said client fund assets at the unit were far below the 500 million yuan regulatory minimum required to retain its fund distribution licence.
UBS has a reputable wealth management business globally, “but when you start competing for online traffic with entrenched local players, you are strategically mis-positioned,” one of them said.
Other foreign firms have also pulled back from the country.
HSBC cut hundreds of jobs after reducing its China wealth venture Pinnacle, while Vanguard left a fund distribution partnership with Chinese fintech group Ant in 2023.
It was reported last week that Fidelity International intends to leave its wholly owned China fund business.
Earlier this year, Schroders also announced exit from its wholly owned fund business in China and agreed to hand its products to Neuberger Berman.
