UBS Group has reportedly decided to drop management fees on select separately managed accounts.
According to a Wall Street Journal report, the Swiss investment bank will stop charging its wealth clients from next January.
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Currently, UBS charges around 1% in fees for separately managed accounts. Two-thirds of the amount is received by the financial adviser, while asset manager receives the remaining for managing the portfolio.
Asset manager fees will be eliminated with the latest move, while the clients will continue to pay financial adviser fees, the publication reported citing an internal memo.
Instead, the new scheme will enable asset managers to get fees from wealth managers depending on their assets under management.
However, UBS will continue to levy asset manager fees on clients who have subscribed to premium services.
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By GlobalDataFrom the middle of next year, UBS will offer the same fee structure to external asset managers.
Designed for affluent customers, separately managed accounts or SMAs offer exposure to stocks and securities. These investments offer tax benefits and carry higher charges compared to mutual funds.
The latest UBS move is anticipated to trigger a fresh price war in the money-management market.
Earlier this month, Charles Schwab dropped online stock trade commission, a move soon emulated by its competitors.
This week, UBS reported its Q3 2019 results. Quarterly adjusted pre-tax profit at the global wealth management arm was $919m, a 2% fall from last year.
