"There is a real focus on Global Family Office -- it’s a pillar of UBS’s strategy," as well as an opportunity to create revenue across wealth-management, asset-management and investment-banking divisions, Kinner Lakhani, an analyst at Deutsche Bank AG in London said.

Invested Assets
Invested assets at Global Family Office, which cross-sells equities trading, derivatives and deal advice, have doubled over the past five years to 120 billion Swiss francs ($121.8 billion). But UBS feels it could do more for family-office clients, which became a renewed target for growth after Chief Executive Officer Sergio Ermotti combined the bank’s disparate wealth management units into one, according to a person familiar with the matter who asked not to be identified discussing private deliberations.

Over the next two to three years, gross margins in wealth management “will continue to be under pressure” Ermotti said at a May 30 investor conference, adding that it would be wishful thinking to expect margins on deposits to return to levels seen before the financial crisis.

That means banks can’t rely on revenues from sitting on customer cash -- even if it amounts to billions of dollars. In the U.S., there’s a “big opportunity” for UBS from closer cooperation between the investment bank and wealth management to serve ultra-high net worth and Global Family Office clients, Ermotti said.

Family offices have mushroomed in recent years as private wealth surged and more people took an interest in actively managing their affairs, said John Mathews, head of private wealth management and ultra-high net worth for UBS Wealth Management Americas. Newer, more flexible iterations of the traditional model -- such as family offices that are virtual or manage money pooled from several families -- mean family offices can make sense for a wider range people.

“Years ago, you had to have around $500 million to have a legitimate family office,” Mathews said. “That number is going down now, to around $200 to $150 million.”

Outside Help
The family-office concept is relatively new in Asia, despite rapid wealth accumulation there. An estimated 17 percent of the world’s 5,300 single-family offices are based on the continent, according to Campden Wealth. The nascent market offers banks a chance to get in early when families most need outside help. For clients in North America -- where almost almost half of family offices are found -- UBS’s role skews more toward helping established family offices to access different types of investment products across the bank or helping them develop specific strategies around issues like capital preservation or philanthropy.

One area of mutual interest for Global Family Office clients is meeting other families. Such connections may yield co-investments or simply offer a chance to swap information on issues unique to the world’s richest people.

When the bank was recently invited to pitch to a U.S. family office in its third generation, competing against rival banks, the request was for a specific mandate in the markets, Matthews said.

“But the conversation actually turned to two key elements,” he said. “Can you make introductions to us to like-minded families in Asia? And the second piece was non-investment issues -- like trust and estate work, governance. They rewarded us with a fairly large mandate.”