Most Common UBS Wealth Management Interview Questions

UBS' interviews for their Global Wealth Management (GWM) division are among the toughest in the world of wealth management. That's for good reason, however: UBS is a market leader across the world in wealth management.

When thinking about joining a wealth management firm, one word should constantly be in the back of your mind: platform.

When wealth managers speak about platforms what they are referring to is the amount of resources that a wealth management can draw on from their firm. These resources can vary from tax strategists you can connect with your clients to special access to certain kinds of asset classes (such as high-performing private equity funds or hedge funds).

While wealth management, as has constantly been stressed on this site, is ultimately a job that requires one to be quite autonomous, no wealth manager operates in a vacuum. Every wealth manager needs to consider what kind of platform they are joining and how it can be leveraged to best serve their client's needs (and keep them happy).

UBS provides the largest platform of any wealth management firm, with assets under management stretching to over $2,500bln (yes, that's over 2.5 trillion dollars). This is because UBS - with headquarters in Switzerland - has their roots in wealth management and private banking from the very beginning. For UBS, their wealth management division is the crown jewel of their business that are looking to not only protect from their competitors, but also grow into new markets.

UBS' Global Wealth Management has over 25,000 employees and is ranked number one in Asia-Pacific, number two in Latin America, and number four in the United States. This makes it a great platform to join not only for their internal resources, but also because the UBS name is universally recognized and respected for wealth management. 

UBS Wealth Management Interview Questions

Here are some of the most common interviews you'll face at UBS GWM.

Question 1: Why do you want to join UBS Global Wealth Management?

Question 2: What would you rather be, a stock, a bond, or some other asset?

Question 3: What's the real benefit of diversification?

Question 4: What is a simple form of structured note?

Why do you want to join UBS Global Wealth Management?

This is often one of the first questions that you'll get in an interview. What the interviewer wants to know is that you've done your homework. Your answer should not be a boiler-plate one, like those you may read online, for questions surrounding why you want to work at a certain firm.

This question is really meant to be an opening salvo to see if you know what wealth management is all about, or are just looking to join a firm with a fancy name.

You should think about this answer as containing two parts:

1. You should first begin by stating broadly why wealth management is right for you
2. You should then speak to why UBS is right for you (which will leverage the stats in the introductory paragraph)

You should begin by giving your, "Why wealth management?" answer, which should focus in on how you believe that wealth management will allow you to play a meaningful role in people's lives; helping them reach their financial goals over not just the short-term, but the long-term.

You should stress that wealth management will provide you the capacity to be relatively autonomous as you progress through your career at a place like UBS, but at the same time provide the institutional framework to allow you to best serve your clients.

You may also want to note that while you enjoy financial markets, you find that working at an investment bank, or at a private equity or hedge fund, is all a bit removed from helping people. You want to see the faces of your clients and have the responsibility to help them navigate towards their financial goals over a long time horizon. 

As I've stressed in the wealth management guide, you want to be clear is stating that you want to be in wealth management period. You are fine going to wherever you can get an offer to join. This shows commitment to the career, not just to trying to latch on to a prestigious brand name. Then you should make clear that UBS is your number one choice due to them having the largest platform, being globally recognized for excellence in wealth management, and continuing to grow their business (not be a stagnant market leader). 

What would you rather be, a stock, a bond, or some other asset? 

This is quite a common question that can seem a bit funny on the surface. Part of the reason why it's likely asked so much is that it can throw people off as it is certainly quite abstract.

What the interviewer is looking to see is whether or not you understand the risk and return characteristics of asset classes and can tie that to what a wealth manager is generally trying to do (it's not just maximize the returns for the client!). 

For example, because a stock resides at the bottom of a firm's capital structure - having a claim to the residual cash flows of a company after paying its debt obligations - it is much riskier than a corporate bond (more senior in the capital structure). Further, a corporate bond is much riskier than a government bond (in the developed world), although a government bond at present will yield very little (perhaps not even outpacing inflation). 

My personal answer would be a lower rated corporate bond - perhaps rated in the low A or high B range - which would be relatively safe (although some credit risk would exist), but would throw off pre-determined cash flows and very likely pay back the principal amount. This answer demonstrates an acknowledgment that risk is not inherently bad, and that to grow wealth risk is needed, however at the same time shows a reasonable level of conservativeness that is often desired by clients.

Again, this is a bit of a funny question, but it does allow you to show that you understand the different character traits of asset classes. 

What's the real benefit of diversification?

Diversification is all about brining uncorrelated assets - or negatively correlated assets - into a centralized portfolio so that the unanticipated negative returns of a given asset do not drag down the entire portfolio.

The simple example of this over the past five decades has been splitting a portfolio into both equities and bonds. Generally the relationship has been that as equities decline in value, the yields of bonds go down as well (thus making the price of bonds go up since yields and bonds are inversely correlated). 

Another important thing that proper diversification can do is dampen the volatility of returns, creating a smoother level of returns over time. For example, instead of having a portfolio concentrated in tech stocks (which may go up rapidly in value, or fall rapidly in value) one can have a broader mix of equities that will have less volatility.

This dampening of returns is particularly important for wealth management clients that are looking to draw down a certain amount of cash per year (perhaps to fund their retirement, for example).

What is a simple form of structured note?

Structured notes are an incredibly popular product among wealth managers.The simplest form of structured note is the principal protected note (PPN). A PPN is a zero-coupon bond with a derivative embedded in it.

If the price of the underlying that corresponds to the derivative - usually an equity index of some kind - goes below a certain amount, then the investor gets their principal back with no additional level of return. If the underlying goes up by a certain amount then the investor gets some level of return, but not the whole amount.

Here's a little page on structured notes from UBS wealth management themselves.

What You Need to Know for UBS

Preparing for any wealth management interview should not be taken too lightly. In particular because the firm you begin at can heavily affect the trajectory of your career (for both good and ill). 

While wealth management interviews are not as difficult as some other types of interviews in high finance, there are certain ways in which answers should be given. This was demonstrated in the first example answer given here, where a simple question should actually be answered in a specific way.

Wealth managers are looking for not only certain attributes in newcomers, but also a certain level of general knowledge. 

Part of the reason for the creation of this site is that I wanted to shed some light on what to really expect and how to properly prepare. If you're looking for more resources, you can get access to all 180+ questions I've developed or you can read others posts on wealth management interview questions I've published.

Best of luck!