Wealth Management – The New Era UBS Wealth Management Public Wealth Management – The New Era Kobi Faigenbaum CEO, UBS Wealth Management Israel Ltd. December 2012 This presentation is given for educational purposes only and shall not be understood as a provision of investment advice and its content is not intended to be and shall not be construed as an invitation or offer to purchase the securities/and or financial assets mentioned therein.

Is Israel lagging behind global banking trends?

A new era in global banking 1 2 Shift towards Emerging Markets Tighter regulation 3 Changes in client demands

Cross border flow to Emerging Markets 1 Emerging Markets 1999 2009 While in 1999, the cross border flow to Emerging Markets was mainly illustrated by the red lines [Total value of cross border investments between regions of 3-5% of world GDP], in 2009 we saw substantial shift towards the blue lines [5-10% of world GDP], mainly from Europe region Also illustrated, the rapid increase in the total financial domestic assets [represented by the circles, $ trillion] within Emerging Markets countries. Source: IMF and McKinsey Global Institute

Tightening regulation 2 Regulation During the last few years, regulators have introduced new guidelines at country and client levels. The pace and complexity of regulation shows no sign of slowing down in the foreseeable future. On a daily basis, we see media coverage to reflect the market interest and magnitude of those changes. “ …preparing to revamp its direct- advice arm in preparation for the RDR Money Marketing ” “ Switzerland is developing a “white- money strategy" in response to a crackdown on offshore financial centers by the U.S. and European countries eager to recoup money from taxpayers banking abroad. Bloomberg ” “ The U.S. Treasury Department said Thursday it’s talking to more than 50 countries and jurisdictions around the world to implement a law aimed at fighting tax avoidance Wall Street Journal ”

Expected changes in model service 3 Clients The "new customers" Looking for Entrepreneurs Professionals & CEOs Business owners Single Family Offices Performance Sophisticated solutions to their wealth Tailored made solutions Adding value for their business as well as family More involvement in their investment process Characterized by Sophisticated Knowledgeable Younger & Faster For illustration purposes only

So what is the difference? 3 Clients Private Banking Wealth Management Emphasizes the relationship as leading indicator: "Red Carpet" Emphasizes different solutions to the client's complex set of needs For illustrative purposes only For illustrative purposes only

The spectrum of Wealth Management services 3 Clients • • Discretionary Mandates Discretionary Mandates • • Advisory Mandates Advisory Mandates • • Investment Funds Investment Funds • • Non Non - traditional Asset Classes - traditional Asset Classes • • Structured Products Structured Products • • Cash Products Cash Products • • Trading Trading • • Financial Planning Financial Planning Asset Asset • • Succession Planning Succession Planning Management Management • • Pension Planning Pension Planning • • Life Insurance Life Insurance • • Trusts Trusts • • Foundations Foundations Financial Planner Your client advisor • • Numismatics Arts &collectables • • Philanthropy Philanthropy Banking Corporate You Life Cycle Life Cycle Services Services Client Management Management • • Corporate Finance • • M&A • • IPO • • Networking Liability Management Liability Management • • Mortgages Mortgages • • Lombard Lombard • • Financing Financing For illustrative purposes only

Can Israel catch-up with these trends?

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