What You Need to Know
- BlackRock, Capital Group and JPMorgan are among the asset managers providing model portfolios as part of the expanded offering.
- In June 2020, UBS expanded its zero-manager-fee offering to include third-party strategies.
- Capital Group, parent of American Funds and a partner with UBS on the initiative, says models have become one of its fastest-growing businesses.
UBS Wealth Management USA has expanded its offering of zero-fee separately managed accounts (SMAs) with model portfolios developed by BlackRock, Capital Group, Dimensional Fund Advisors, JPMorgan, Natixis Investment Managers and Nuveen.
As of Wednesday, UBS clients now have access to eight model portfolio suites in the offering, which has no additional investment manager fee. (The underlying funds have their own fees.)
Each model portfolio was “carefully constructed” by its manager to address a variety of objectives and enable UBS financial advisors to effectively address a broader number of client needs, the firm said.
The zero-fee move by UBS comes about a week after Morgan Stanley’s Managed Advisory Portfolio Solutions business added model portfolios from BlackRock, Goldman Sachs and JPMorgan to its Select UMA platform. This expansion includes three exchange-traded fund model suites with no sub-management fees, which can be tailored to clients with different risk tolerances at a $25,000 minimum, the wirehouse said.
Earlier Steps Taken by UBS
In January 2020, UBS launched its zero-manager-fee pricing structure for strategies available from UBS Asset Management, becoming the first firm to provide clients with access to select SMAs with no additional manager fee, it said.
In June, UBS expanded the offering to include third-party asset manager strategies with no additional fees. Certain strategies, such as those that include sustainable investing or personalized tax management, can be selected for a fee.
All of its SMA strategies are available through WM USA’s ACCESS platform, with Vestmark Advisory Solutions serving as the discretionary overlay manager for model implementation. This is a “turnkey solution that connects UBS advisors with a wide array of SMA strategies from some of the world’s top asset managers,” according to John Lunny, Vestmark CEO.