UBS charging clients fees to create financial plans

In another sign that the wirehouses are shifting from transactional business to more-comprehensive financial planning, UBS Wealth Management Americas is now charging fees for the financial plans that its advisers draft for clients.

The new policy was put in place last year, said Jason Chandler, head of the UBS wealth management adviser group. It was not specifically intended to increase fee revenue for the firm — though that has happened — but to increase clients’ commitment to their plans.

“When clients pay for the financial plan, they’re more invested in it,” said Mr. Chandler, who oversees more than 7,000 advisers at UBS. “It works well with higher-net-worth clients.”

So far this year, the company has earned $3 million in fees on financial plans, versus $1.4 million during all of last year, according to Mr. Chandler. The size of the fee is left up to the discretion of the adviser. In the first quarter, the average amount charged by UBS advisers for a plan was $4,100.

‘LOSS LEADERS’

Financial plans used to be “loss leaders” at UBS, Mr. Chandler explained, and advisers would make their money executing elements of the plan later on. He is getting advisers to buy into the new policy by giving them 50% of the fees they charge — substantially higher than their normal grid rate for revenue production. The company also is putting another 15% of the fees generated from financial plans into expense accounts for advisers to spend as they see fit.

“This helps get our advisers into deeper conversations with their clients,” Mr. Chandler said.

Related Topics: Financial Planning