UBS Wealth Management Americas has standardized its investment advisory fee across all its wealth programs in its latest move to comply with the Department of Labor (DOL)’s fiduciary rule, according to a Securities and Exchange Commission filing.
Effective July 1, UBS will limit various client advisory fees to a maximum charge of 2.5%, according to the same filing.
A spokesman for UBS declined to comment on the latest changes.
Meanwhile, separately managed account (SMA) fees will be separate from the UBS investment advisory fee in all SMA program. However, as a result of the change they will be in addition to the standard wrap platform fees.
Fees for existing advisory accounts will not be automatically increased as a result of these changes but in some cases, advisors will be able to raise fees. For example, fixed income accounts in UBS’ portfolio management program (PMP) currently have a maximum charge of 1.25% but the new change will subject such accounts to a 2.5% maximum.
PMP accounts currently priced over 2.5% such as equities and balanced accounts, which could previously cost up to 2.8%, will see a fee reduction, based on the filing.
The move to streamline various client pricing levels is likely to simplify the firm’s compliance with aspects of the DOL rule as it removes the advisor's incentive to choose one SMA strategy over another simply based on price.
Prior to the change, UBS offered a single-contract SMA program called ACCESS, through which the firm’s financial advisors would receive fees that vary depending on the price of the SMA strategies they select for their clients.
Early in June, UBS had adjusted how it compensates brokers as part of its move to comply with the DOL rule. The wirehouse suspended its traditional pay formula which pays brokers a scaled percentage of the fees and commissions they generate off all the assets they oversee.
Starting on June 9, the firm has decided to base broker’s monthly pay from retirement assets based on the average return of these assets in 2016.