In another sign that the wire houses are shifting from transactional business to more-comprehensive financial planning, UBS is charging fees for the financial plans that its advisers draft for clients.
UBS gave its force of about 7,000 US-based advisors new compensation incentives to use financial plans with clients in 2013.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The new incentives will help both advisors and clients outline their goals and to inspire clients to keep on task when it comes to saving for their goals.
Head of the UBS wealth management adviser group, Jason Chandler, said: "The new policy which was put in place in 2012 was not specifically intended to increase fee revenue for the firm – though that has happened – but to increase clients’ commitment to their plans."
Chandler said that this action came as UBS talked to clients of other firms, particularly registered investment advisors.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataCharges applicable
When a UBS advisor creates a plan with a client where they charge US$1,000 or more, the advisor is eligible for a 50% pay out rate on that plan, plus 15% of that revenue goes into an expense account to help them fund future business growth.
The number of advisors charging for this kind of advice has climbed 259% year over year.
According to Chandler, the company has earned US$ 3 million in fees on financial plans in 2013, versus US$1.4 million during 2012.
The average fee charged per plan this year is US$4,100.
"My belief is that the industry will move a little bit more towards this pay for investment model. Similar to lawyers and CPAs, where clients pay a retainer for advice and then additional fees based on the services they use. That model could work particularly well with the high net worth and ultra high net worth client sets," Chandler added.
