UBS eliminating SMA management fees

The company believes the move will help advisers compete for business

Oct 22, 2019 @ 2:27 pm

By Ryan W. Neal

UBS Financial Services is entering the race to zero.

In an internal memo, the Swiss bank announced it is eliminating management fees on select separately managed accounts. While there is no specific price set on SMAs, clients typically pay a 1% management fee, according to the Wall Street Journal. The new pricing will go into effect January 13, 2020.

Initially, only single asset class strategies available on UBS's ACCESS and Strategic Wealth Portfolio platforms will carry no management fee. By mid-2020, multi-asset class strategies and some third-party SMAs will also be commission-free.

Investors in so-called premium strategies such as tax management and sustainable investing will still be charged incremental fees.

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In the memo, UBS said the new SMA pricing will help its advisers compete for business and grow their practices.

The announcement comes amid a flurry of financial institutions cutting out commissions on trading. Charles Schwab Corp. made the first move, followed by the other discount brokerages: TD Ameritrade Holding Corp., E*Trade Financial Corp. and Fidelity Investments.​

Raymond James slashed charges and eliminated transaction fees for stocks, ETFs and options, but only for fee-based accounts managed and sold by registered investment advisers who custody assets with the firm.

Bank of America Merrill Lynch also removed limits on free online trades for clients with a Bank of America checking account and at least $20,000 in cash or securities.

[More: Morgan Stanley's James Gorman says pressure on advice fees could be next]

UBS's move comes as part of a consolidation of its U.S.-based wealth management and asset management divisions. In addition to simplifying SMA pricing, the bank said the move will expand choice and transparency and align its offering with the Securities and Exchange Commission's Regulation Best Interest.

UBS also reported its third quarter earnings on Tuesday. The firm reached $2.5 trillion in investible assets but continued to lose advisers. UBS reported a total adviser workforce of 6,627 at the end of the third quaqrter, losing 62 brokers from the second quarter and and 283 advisers year-over-year.


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