UBS is closing its Australian wealth management business, with senior staff leaving to form their own company.

Following months of speculation, a deal has been reached between the Swiss bank and local staff which will allow them to try to sign up clients for the new independent venture.

UBS said that the decision to leave the Australian wealth market was partly due to increased regulatory and client requirements in the industry.

Mike Chisholm, head of UBS Wealth Management Australia, quit the firm on Monday in order to form Crestone Wealth Management. Chisholm has been head of the UBS business since November 2010.

Chisholm told Australian newspapers that all of UBS WM’s advisers (around 100) had agreed to join him at his new venture. He said that Crestone will use UBS to clear all trades and will have access to its research. Crestone is due to be spun out from UBS as an independent business from October 1. The advisers have this week to decide whether to join Chisholm or take redundancy from UBS.

UBS Wealth Management currently has about $20 billion worth of funds under management. Last month Juerg Zeltner, president of UBS wealth management, said that the bank was reviewing its Australian business.

Alain Robert, UBS global vice-chairman for wealth management, said that the decision to exit the Australian wealth market was a “difficult one” and made as a result of a number of factors.

He said: "The wealth management industry is experiencing substantial changes due to increased regulatory and client requirements which have led to increasingly complex operational processes. UBS' global wealth management business model of providing holistic client advice has become increasingly difficult to fully operate on a sustainable basis in the local market, which is dominated by a brokerage-based system."

UBS Australia country head Matthew Grounds added that Australia remained strategically important to the bank. He said that UBS would continue to invest in its domestic investment banking and asset management businesses.