UBS plans to drop fees on more separately managed accounts for its wealth management clients and add third-party money managers in the Americas.
On Tuesday, two executives told the firm’s roughly 6,600 advisors in the region that strategies tied to just one asset class will be available without SMA management fees on its ACCESS and Strategic Wealth Portfolio platforms starting Jan. 13.
“This approach aligns with the current availability of UBS AM SMAs based on CIO Equity Models offered with no additional SMA management fee, which launched this past July,” according to a memo sent Tuesday by Suni Harford, president of asset management, and Tom Naratil, president of UBS Americas.
In addition, UBS will open its asset management platform to outside fund vendors and expand the no-fee program by midyear. “By the middle of next year, select UBS AM multi-asset class strategies, as well as select strategies from any participating third-party managers, will also be offered with no SMA management fee,” the executives explained.
“Our financial advisors will now be in an even better position to successfully compete for business, grow their practices and deliver for clients,” they added in the memo.
Naratil told The Wall Street Journal that UBS is likely the first wealth firm to drop the charge clients typically pay asset managers for oversight of SMAs.
These fees are about 1% of assets today, with about one-third of the fees being paid to the asset manager and two-thirds going to the advisor, the Journal said. Overall, asset managers will still be paid by financial advisors going forward.
“This makes it clear: The premium is still on financial advisors,” Naratil said in an interview with the Journal. “Asset management really provides the tools.”