By Michael Shields

ZURICH, (Reuters) – UBS, a Swiss bank has bought Wealthfront in the United States. Wealthfront is a U.S.-focused, automated wealth management platform. It has assets of more than $27B and was acquired in an all-cash transaction that they said would be worth $1.4B.

Wealthfront’s acquisition is expected to be completed in the second quarter of 2022. Wealthfront has over 470,000 customers in America and targets Gen Z and millennial investors.

The two companies released a joint statement Wednesday stating that UBS will “accelerate its growth ambitions within the U.S.”, broaden its reach among wealthy investors, and expand its distribution capabilities and capabilities.”

They added that Wealthfront would become an UBS subsidiary and operate under UBS Global Wealth Management Americas.

Ralph Hamers from UBS stated that “Adding Wealthfront’s capabilities and client list to our global investor ecosystem will significantly increase our ability for growth in the U.S.”

Wealthfront’s partnership with UBS will allow Wealthfront to provide additional services for clients, said its CEO David Fortunato. Fortunato added that Wealthfront could not be happier to have found a strategic partner, who holds the same views on technology.

UBS announced in October that they wanted to create digitally scaleable advice models for clients who are wealthy in America and have at least $2 million in available.

The trend was set by U.S. counterparts Goldman Sachs (NYSE 🙂 Morgan Stanley (NYSE:) to expand their client base beyond those of super-high net worth individuals.

UBS claimed it would finance the transaction with excess capital.

The companies said UBS Investment Bank is acting as financial adviser to UBS and Sullivan & Cromwell is legal counsel. Qatalyst Partners is Wealthfront’s financial adviser and Fenwick & West is acting as legal counsel.