As UBS cuts some fees for clients, its brokerage force shrinks
UBS will slash client fees on some accounts, mirroring moves by other Wall Street firms to cut prices.
The firm, whose shrinking brokerage force hit record productivity for the third quarter, will cut management fees on separately managed accounts starting in January, according to an internal company memo. The Swiss bank is also combining its portfolio and asset management and execution resources in the Americas, according to the memo.
By simplifying SMA client pricing, the memo also states, UBS will be better aligned with the SEC’s recently enacted Regulation Best Interest, whose enforcement takes effect next June.
Details of the fee changes were first reported by The Wall Street Journal.
UBS’s move follows similar policy shifts at competitors. Bank of America announced this week that it would expand commission-free ETF trades on its Merrill Edge offering.
Earlier this month, custodians Charles Schwab, TD Ameritrade and Fidelity unveiled zero-commission ETF trades.
In recent years, UBS has focused on catering to high-net-worth and ultrahigh-net-worth clients. It’s built out its lending and other services with an eye to serving both sides of a client’s balance sheet. The wirehouse also greatly reduced its recruiting efforts and dropped out of the Broker Protocol, an industrywide agreement that eased advisor moves between member firms.
The firm’s advisor ranks have since thinned, dropping to 6,627 for the third quarter from 6,910 for the year-ago period, according to UBS’s earnings report released this week. That figure includes advisors based in Canada and Latin America. Like its wirehouse competitors, UBS has suffered some attrition as talent decamps to regional and independent firms.
But even with fewer advisors, the company reported record productivity: $1.4 million in revenue per advisor, according to UBS.
The firm’s Americas wealth management unit reported operating income of $2.3 billion, up 3% year-over-year. Invested assets topped $1.3 billion for the quarter, up 3%, while advisory assets increased 4% to $523 million.
After several quarters of suffering net outflows, the wirehouse reported zero net new money flows for the third quarter.