Capital Allocators – Inside the Institutional Investment Industry Episode: John Mathews – Steering the Largest Wirehouse at UBS (Private Wealth 2, EP.444) Release Date: May 12, 2025

In this insightful episode of Capital Allocators, host Ted Seides engages in an in-depth conversation with John Mathews, the Head of Private Wealth Management in the Americas for UBS. As the world's largest global wealth manager, UBS oversees a staggering $6 trillion in assets, with Mathews managing $2.1 trillion of that wealth in the United States. Their discussion delves into the intricacies of managing vast private wealth portfolios, the evolving landscape of wealth management, and the strategic initiatives driving success at UBS.

1. Career Paths and Evolution of Wealth Management

Ted Seides opens the conversation by sharing his journey from aspiring lawyer to becoming a Financial Advisor and eventually the leader of UBS's private wealth business. Describing himself as the "Accidental Executive," Ted emphasizes his early adoption of asset management fee-based solutions, moving away from traditional equity selection to a more consultative and holistic approach.

Ted Seides [06:19]: "I call myself the Accidental Executive... I now lead the private wealth business for UBS here in the Americas."

John Mathews probes into Ted's career trajectory, highlighting the significant shift in wealth management over the past three decades—from purely stock-based portfolios to incorporating a diverse mix of alternative investments.

Ted Seides [08:14]: "I have hundreds of private wealth advisors that report into our business here at UBS... It's like one large partnership."

2. The UBS Private Wealth Platform: Scale, Scope, and Organizational Structure

Mathews seeks to understand the vastness of UBS's platform. Ted elaborates on UBS's global dominance, managing over $6 trillion in assets with a significant presence in Asia and Latin America.

Ted Seides [10:58]: "We're the world's largest global wealth manager... $2 trillion of assets under management in the United States."

He outlines the organizational structure, emphasizing teamwork with 661 private wealth advisors across 230 teams. This team-based approach allows UBS to manage the complex needs of ultra-high-net-worth clients effectively.

Ted Seides [11:04]: "We have 661 what we call private wealth advisors... because it's a team sport."

3. Investment Strategy: Personalization, Specialization, and Customization

A central theme of the discussion revolves around UBS's investment philosophy grounded in personalization, specialization, and customization. Ted explains how UBS maintains an open architecture platform, allowing advisors to recommend a wide array of products without being confined to internal offerings.

Ted Seides [13:09]: "We are completely agnostic in our private wealth business... Personalization, specialization and customization."

He underscores the importance of bringing in internal specialists—such as estate attorneys and philanthropy experts—to provide tailored solutions for clients, ensuring that each client's unique needs are met with precision.

4. Centralization vs. Decentralization in Investment Decisions

Mathews inquires about the balance between centralized strategies and decentralized implementation. Ted highlights UBS's approach, where advisors operate like entrepreneurs within set guidelines provided by UBS's Chief Investment Office (CIO).

Ted Seides [16:46]: "Our advisors... are entrepreneurs. They have their own styles and philosophies... which brings more consistency into the overall offering."

This balance allows for both uniform strategic direction and individual advisor flexibility, fostering innovation while maintaining cohesion across the platform.

5. Key Investment Themes for 2025 and Beyond

Ted shares five pivotal investment themes guiding UBS's strategies:

1. 2025 as a Year of Testing: Anticipating market volatility and emphasizing resilience.

   Ted Seides [19:36]: "2025 was going to be a year to be tested."

2. Family as a Major Issue: Managing intergenerational wealth transfer, especially as baby boomers age.

   Ted Seides [21:24]: "We have to help them make sure they manage their wealth and how to make sure they distribute it properly."

3. Security of Everything: Enhancing personal and digital security measures for clients.

   Ted Seides [23:02]: "Everything's about security... personal computer system can't get hacked."

4. Artificial Intelligence (AI): Embracing AI technologies to improve practice efficiency and create investment opportunities.

   Ted Seides [23:02]: "You have to be a user of this stuff... It creates investment opportunities for us."

5. Staying in the Markets: Encouraging clients to maintain their investment strategies despite market fluctuations.

   Ted Seides [24:59]: "Bull markets are long and bear markets are short and painful. Trying to keep our clients focused on the long game."

6. Shifts in Asset Allocation and Alternative Investments

A significant portion of the conversation focuses on the increasing allocation to alternative investments within UBS's portfolios. Ted notes the growing demand among ultra-high-net-worth clients for alternatives like private equity, which offer potential alpha and reduced daily volatility.

Ted Seides [25:16]: "There's a larger and Larger allocation to alternative investments. No question."

He also discusses the mainstreaming of alternatives, making them accessible to high-net-worth clients beyond the ultra-rich, thanks to innovations like liquid portfolios with improved liquidity options.

Ted Seides [26:40]: "Alternatives will be not for everyone, but they're going to be for the wealthier client segment."

7. Platform Curation and Manager Relationships

Mathews explores how UBS curates its investment platform. Ted explains the rigorous due diligence process managed by experts like Jerry Pascucci, ensuring only top-performing and reliable managers are selected.

Ted Seides [29:06]: "We're trying to think where's the world going to be in five years from now... identifying opportunities that we think are going to be the place to be in five years from now."

This strategic curation ensures that UBS's platform remains competitive and aligned with future market trends.

8. Alignment of Incentives and Fee Structures

Addressing the critical issue of alignment and incentives, Ted outlines UBS's agnostic stance, focusing on providing the best solutions at the best prices for clients. He describes flexible fee structures that separate advisory fees from investment product fees, promoting transparency and client-centricity.

Ted Seides [41:48]: "We try to be completely agnostic. Best possible solution for the best possible price for our clients."

This approach fosters trust and ensures that the interests of clients are always prioritized.

9. Advisor Dynamics: Turnover, Diversity, and Talent Development

The conversation shifts to advisor management, where Ted acknowledges the challenges of advisor turnover and the imperative of fostering diversity. He emphasizes UBS's initiatives to build diverse, multi-generational teams that reflect their client base.

Ted Seides [45:24]: "Teams have to start looking like the clients you serve or they have to start looking like the world we live in."

He also highlights the creation of the Wealth Advice Center, an incubator for nurturing young advisors, ensuring a steady pipeline of talent to meet future demands.

10. Maintaining Leadership and Future Outlook

In discussing how UBS plans to sustain its leadership, Ted underscores a client-first approach, continuous innovation, and humility. He warns against the pitfalls of ego and arrogance, advocating for a culture of listening and adaptability.

Ted Seides [49:21]: "If everything we do is focused around clients, then everything else is going to work out."

He remains optimistic about the growing role of alternatives in client portfolios, anticipating a shift towards higher allocations as advisors and clients become more comfortable with these investment vehicles.

11. Personal Insights and Closing Remarks

Towards the end, Ted shares personal anecdotes, reflecting on his humble beginnings and unexpected career growth. He speaks passionately about his hobbies—fishing, golf, and hiking—and his fascination with the possibility of human habitation on Mars.

Ted Seides [53:21]: "Can we actually live on Mars? And I guess we're going to find out here in a few years."

He concludes with a heartfelt commitment to making a positive impact on people's lives, both professionally and personally, emphasizing the importance of helping clients achieve their financial and personal goals.

Ted Seides [53:38]: "It's all about having a positive impact on people... that's a pretty good chapter in my book."

Conclusion

This episode offers a comprehensive look into the strategies and philosophies driving one of the largest private wealth management platforms globally. John Mathews and Ted Seides provide valuable insights into managing complex wealth portfolios, the integration of alternative investments, and the importance of a client-centric approach in maintaining industry leadership. Their discussion underscores the evolving nature of wealth management and the critical role of adaptability, specialization, and personalized service in navigating future challenges.