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UBS tightens relationship with tech developer SigFig

UBS is shutting its U.K.-based digital advice business, SmartWealth, and selling the technology to SigFig, a Silicon Valley-based startup that helped develop the wirehouse's robo advisor for the U.S. market.

The deal, terms of which were disclosed, tightens the two-year relationship between SigFig and UBS. The Swiss bank also has an equity stake in SigFig.

"This acquisition underscores our strong, growing relationship with UBS, as we work together to provide better digital financial solutions to advisors and their clients," SigFig CEO Mike Sha said in a statement. "More specifically, an increasing number of consumers, banks and enterprises in the U.K. are seeking digital wealth management solutions, and we saw this deal as a perfect opportunity to quickly establish a veteran technology team and U.K. compliant offering."

UBS said in a statement that it was satisfied with its SmartWealth platform, but that its near term potential was limited and that SigFig was better placed to broaden "the commercial prospects of the IP behind UBS SmartWealth."

"We believe the decision serves the best interests of our business and will allow us to invest further in other client-facing improvements, while sharing in the future success of the IP we have created via our equity holding and ongoing partnership with SigFig," the bank said.

UBS said it wants to bring more transparency to philanthropy and use investment capital to lower the risk that nonprofits take on in running programs - freeing up their resources to pursue even more projects.
Employees pass between offices as UBS Group AG logo sits on a walkway at the UBS headquarters in Zurich, Switzerland, on Monday, Jan. 22, 2018. Photographer: Stefan Wermuth/Bloomberg

SigFig will have an exclusive five-year licensing agreement to use SmartWealth’s technology, after which the technology's source code will transfer to the technology developer. UBS's digital team behind SmartWealth has moved over to SigFig as part of the deal.

Founded in 2007, SigFig has pivoted from offering a robo advisor aimed at consumers to developing digital advice solutions for banks and broker-dealers. The firm's other clients include Wells Fargo and Citizens Financial.

In addition to UBS, SigFig's other investors include Bain Capital Ventures and Union Square Ventures.

While some wealth management firms have opted to develop automated advice platforms in house, UBS chose to find an outside partner on the belief that a startup could offer unique solutions.

The firm's answer to the challenge posed by robo startups launched earlier this year after a period of roughly 18 months in development with SigFig.

UBS's digital solution available in the U.S., UBS Advice Advantage, is offered through its Wealth Advice Center. The platform has a $10,000 minimum and costs 75 basis points.

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