Strategy and structure

Operating as “one firm”

We firmly believe our integrated business model creates more value than our businesses would as stand-alone units because business opportunities do not respect artificial demarcation lines between Business Groups. Our clients should be able to access all the services our firm can provide, where and when they are required, and regardless of what combinations of teams lie behind the solutions. This “one firm” approach facilitates client referrals and the exchange of products and distribution services between businesses and contributes significantly to our revenue flows.

We form internal partnerships to make the best use of our intellectual capital and the proximity of content and distribution. This increases our ability to recognize trends across business segments, serve clients better – and ultimately create new revenue opportunities. An example is the research collaboration between our wealth management and asset management businesses to service ultra-high net worth clients, whose needs are often similar to those of institutional clients. Given the turbulent markets seen in the past three years, these clients are increasingly interested in preserving their capital while achieving reasonable returns at a competitive price. As a result, our asset management business started to develop products for this client segment, such as an absolute return bond fund. With such targeted products and by linking the clients’ family offices with our investment management professionals, we were able to attract significant additional invested assets.

In our US domestic wealth management business, now part of our global wealth management franchise, our “one firm” model is supporting a transformation from a traditional US brokerage firm into a comprehensive wealth management business. The expertise of our treasury unit and the sophisticated lending practices developed in our Swiss business banking unit, have been used widely, particularly for our Utah-based UBS Bank USA, which opened in 2003. It now offers a variety of lending products, broadening the scope of our financial relationships with our US clients. UBS Bank USA is now one of the top 50 banks in the US.

Another advantage of our “one firm” model is that it helps us to share activities between different parts of our businesses, eliminating redundant infrastructure, services, management and control functions. One example is our centralized treasury process which ensures that cash flows within UBS are pooled and netted before being funded through one access point to the money markets. At the same time, the way we embed the same approach to risk management deeply in all our businesses is one of our most important success factors. Another example is our information technology infrastructure (ITI) unit, launched successfully in 2004. This unit, housed within Corporate Center, integrates all IT infrastructure functions across UBS – data networks, telephone and other communications systems, IT security, distributed computing and servers, mainframes and data centers, market data services, user services and desktop computing.