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UBS exits China fund sales amid tough competition
11 Sep
Summary
- UBS is closing its fund sales operation in China by September.
- The digital wealth platform WE.UBS struggled against domestic rivals.
- Client assets fell below the regulatory minimum for license retention.
UBS is reportedly preparing to cease its fund sales operations in China by the end of September. The Swiss banking giant established its digital wealth platform, WE.UBS, in late 2022, targeting wealthy Chinese clients. However, the platform struggled to gain traction in a market dominated by nearly 400 domestic competitors.
Sources indicate that WE.UBS faced significant challenges in expanding its reach, compounded by overlap with other UBS business lines in the country. Client assets at the unit are reported to have fallen below the 500 million yuan regulatory minimum necessary to retain its fund distribution license. This decision follows similar withdrawals by other international firms like HSBC, Vanguard, and Fidelity International from the Chinese market.
While the fund sales business will shut down, UBS stated that its other wealth management platforms in China remain operational. Resources from the closing unit are expected to be integrated elsewhere within the bank's Chinese operations. The move highlights the difficulties foreign financial institutions face when competing with entrenched local players in China's financial services sector.
