UBS Wealth Management Review

This article will review UBS wealth management. It will describe some of the positives and negatives, including for expats, and others.

If you aren’t satisfied with UBS, or want another investment solution, you can contact me on this page.

Introduction

UBS is a multinational diversified financial services company, derived from the Union Bank of Switzerland and headquartered in Zurich.

UBS is engaged in actually all main financial activities, including retail and commercial banking, investment banking and management, also wealth management.

UBS Wealth Management is a company offered by UBS Financial Services Inc., which offers a multiplicity of different financial services.

The company was found in 1998 in New York City and still continues its loyal activity in 47 states of USA.

This company has an adequate option for nearly everyone who is searching a right financial advice, with a minimum investment of $5000 and a maximum investment of $15 million, depending on their office location and many other things.

UBS Wealth Management has its specialized offices and financial advisors in every US small and big city and globally.

This means every American looking for an individual approach can easily find in his area. Generally, this company’s clients manage corporations, charitable organizations, pension funds and even other banks from individuals. 

UBS works with individuals, institutions and corporations from all over the world, to help people with their problems, find and offer a good solution, be it through award-winning asset management advice, investment banking and asset management experience, or private and corporate banking services in Switzerland. 

  1. UBS Wealth Management Overview

It is one of the world’s largest global wealth managers. This company provides different financial advices and solutions to various clients worldwide, where UBS financial advisors have a full access to numerous tools and researches. 

The operational structure of UBS Wealth Management is consisted of four business divisions and a Group Functions, where each of them is specified in a concrete activity, let’s see what they do.

  • Global Wealth Management – UBS Global Wealth Management, the world’s largest capital manager, provides in-depth advice, solutions and services for wealthy families and individuals around the world. Customers working with UBS profit from a completely integrated set of asset management facilities and experiences, including capital planning, investment management, capital markets, banking, lending, and institutional and corporate financial advice. Customers have access to a wide range of products from leading third-party organizations in the world that complement UBS’s own offerings.
  • Personal & Corporate Banking – it provides all-round financial products and services to private, corporate and institutional clients of UBS in Switzerland, maintaining a leading position in these segments and integrating its offerings into a multi-channel approach. Business is a central element of the UBS universal banking model in Switzerland, supporting other business units by attracting customers and increasing the wealth of private clients so that they can be transferred to Wealth Management. Personal and corporate banking harnesses the cross-selling potential of UBS asset-collecting and investment banking companies and manages a significant portion of the Swiss UBS platform in infrastructure and banking products.
  • Asset Management – UBS Asset Management is a large and diversified asset manager located in 22 countries. We offer investment opportunities and investment styles for all major traditional and alternative asset classes, as well as platform solutions and advisory support for institutions, wholesale intermediaries and asset management clients. It is a leading fund in Europe, the largest mutual fund manager in Switzerland, and a leading foreign firm in China.
  • Investment Bank – provides corporate, institutional and asset management customers with expert advice, innovative solutions, implementation options and full accession to international capital markets. It offers advisory services and provides in-depth research on various assets, as well as access to stocks, foreign currencies, precious metals and selected courses and credit markets through its business units. The investment bank is an active participant in streaming operations in capital markets, including sales, trade and market operations for a number of securities.
  • Group Functions – Group functions consist of services, group assets and liabilities management (Group ALM) and non-core and obsolete portfolio. Services include the Group’s oversight functions, such as finance, risk control (including compliance) and legal matters, and, as part of them, some corporate and management services and related expenses. In addition, it provides all logistics and support services, including operations, information technology, human resources, regulatory relations and strategic initiatives, communications and branding, group functions, physical security, information security, as well as outsourcing, offshoring and offshoring. The ALM Group is responsible for managing risks focused on business units, investments and output, as well as for managing the Group’s structural risks. A non-core and inherited portfolio consists of non-core businesses and inherited positions that were part of the Investment Bank prior to its restructuring.

This article will more focus on the wealth management/investment side of UBS’ operations, rather than corporate solutions, but will briefly touch on some of the other services.

Pros:

  • UBS offers sophisticated tax planning services.
  • For financial advice, they don’t provide the worst options in the market
  • Unlike some banks like HSBC, they don’t always offer their own fund ranges.
  • Mobile apps are available for both iOS and Android.
  • They are better than some other private banks we will review in future articles

Cons:

  • They are trading on brand name. Many people out there mistakingly think size indicates safety. In fact, almost all investment solutions which are regulated, have basic safety features now
  • The fees are high as a generalisation
  • Isn’t always as portable for expats as it could be. If you sign up with UBS in Switzerland and move to Africa, Asia or North America, your account won’t be serviced seamlessly
  • In the same way boutique hotels can provide better service than 5 star ones, smaller operators can ensure better client services
  • The banks in general can be dishonest in their tactics. I am not making a point about UBS specifically, but the whole banking sector, compared to investment platforms and boutique providers. In the video below, I explain more:
  1. How does UBS Wealth Management work?

Regardless of whether you are a new investor looking for to increase your own capital, or a high-net-worth person searching a higher return on your investment, UBS Wealth Management does have solutions.

So they are unlike firms with very high minimum investment thresholds.

UBS offers several discretionary and non-discretionary programs, with minimum account sizes of $ 5,000 investment. Each program has various strategies and asset classes – starting from stocks to municipal bonds and real estate investment funds.

Smaller investors who are interested in creating an account with UBS Wealth Management have several options.

They can invest their money into a UBS Managed Portfolio, where the minimum investment amount size must be $ 5,000. UBS managed portfolio program is a discretionary program, which means that your financial manager has every right to make investment decisions at his discretion.

Another discretionary program is called UBS Advice Portfolio, it has a higher minimum investment amount size of $ 10,000. This program is partially based on an algorithm that allows you to constantly adjust the distribution of assets in your portfolio.

As a rule, UBS also offers non-discretionary programs in which all the decisions are being held by the client.

The programs include a feature called ‘PACE Select’, with a minimum investment of $ 10,000 and UBS Strategic Advisor with a minimum investment of $ 50,000. So what is ‘PACE’? It is a program for mutual funds only, which means that investments made via ‘PACE’ account are limited to mutual funds.

UBS Strategic Advisor is more flexible, it allows you to invest in stocks, fixed income securities, exchange-traded funds (ETFs) and other asset classes.

There is also a special program for high-net-worth individuals and wealthy individuals through UBS Asset Management.

Minimum investment sizes at UBS Asset Management start at $ 15 million. UBS Asset Management uses an active management process, distributing assets based on specific goals and guidance given of the client.

Moreover, UBS cooperates with its clients to find third-party managers, while UBS’s role is to be a matchmaker or a consultant.

One of these programs, named ‘ACCESS’, gives UBS the power to directly hire a manager, while in the other program, Managed Account Consulting, the client enters into a contract directly with the manager, and UBS reports on the performance of your account

. As for the latter, there is a direct relationship between you and your financial advisor, which means that the fees are negotiated between you and your consultant.

In addition to the fees you pay UBS for fixing up your relationships with the financial advisor, you can get a higher total fee for this program, which can exceed to 3% in some cases.

  1. What are UBS Wealth Management fees?

UBS Wealth Management USA uses the following payment models.

  • Fee-only model – The most important advantage of this model is that clients do not need to worry about the fact that their financial managers depend on commissions when providing financial recommendations. Paid consultants have a fiduciary duty towards their clients. This means that, by law, they are obliged to put the interests of their customers in the first place and cannot sell them a product that they do not need or that runs counter to their goals or risk tolerance.
  • Performance or incentive model – the uniqueness of this model is that instead of charging a fixed commission or fee based on assets under management, the capital manager charges a percentage of the growth of the benchmark index. If the client’s account does not win the benchmark, the manager loses the commission. This model tightly links the incentives of wealth management companies and customers, but it can also push managers to an increased risk level.

As adamfayed.com cannot usually accept US clients, however, it should be pointed out that fees outside the US can sometimes be higher than in America.

Fees under UBS Wealth Management

The amount that UBS Wealth Management customers pay in the form of commissions depends on the amount they have invested, in addition on the investment strategy that they pursue.

Fees are usually paid quarterly, also most programs do not have a minimum annual fee.

For most investment programs of UBS, the maximum annual fee is 2.50% of the wealth that is under management.

This maximum rate is working for both UBS Managed Portfolio Program and non-discretionary UBS programs.

Other UBS wealth management programs may have lower or even higher annual percentages, for example, the maximum annual commission of the UBS Advice Portfolio Program makes up 0.75% of assets under management.

  1. Opening a UBS Wealth Management Account.

There are several ways to create an investment account with UBS.

If you want to meet someone face-to-face, your best bet is to contact your local UBS affiliate or financial advisor affiliated with UBS, although in-person interactions is becoming less common.

To be more helpful, UBS also has a special tool on its website that can help you find a local advisor by name or other details.

And another option, you can simply enter your contact information and additional information, which is optional, about the services you are searching, and the next step belongs to UBS, who will select a financial adviser who will contact you immediately.

Before signing up an account with UBS, you must fill out a Consultative Relationship Agreement and an application.

This agreement includes all the possible types of accounts that a client can choose while using UBS Wealth Management, so some of the information that are present in them may be redundant for any individual investor.

Albeit, this allows UBS to open additional accounts for you in the future without having to fill out duplicate documents.

In fact, there is no such type of client to whom UBS Wealth Management cannot suggest its services. Families and individuals may have numerous options of financial advisors through UBS Wealth Management.

As already mentioned, UBS Wealth Management can also work with institutional clients such as corporations and charities. In general, UBS Asset Management’s most clients work with large institutions, such as state and local government employee benefit plans, as clients, funds, and insurance companies.

Disciplinary action against UBS

Over the past decade, about 20 disciplinary decisions have been made at UBS.

The fresher one was in September 2016, UBS was penalized by the SEC for a total of $ 15 million for activities involving convertible notes.

In accordance with the UBS disclosure, the SEC regulation revealed that UBS “was not able to intelligently control its RCN sales without developing and implementing adequate training and education for its financial advisors on some aspects of RCN shares.”

Vermont State, the US Department of Justice, FINRA, the North American Association of Securities Administrators and the Pennsylvania Securities Commission imposed other fines and penalties against UBS.

Let’s discuss another disclosure of 2012, regarding a lawsuit filed against UBS by FINRA: “FINRA claimed that the firm was unable to install and support an observational system, including the written operations, reasonably cultivated to reach compliance with NASD and FINRA principles connected with the sale of non-traditional exchange-traded funds on accounts where the company provided brokerage services to some retail customers, and the firm was unable to provide proper formal training and guidance for its checked in representatives and observers regarding non-traditional ETFs.”

UBS isn’t unique in this regard, but it does show that being big isn’t always safe.

5. UBS Competitors.

As already mentioned, UBS is a Swiss multinational investment and financial services company based in Zurich, Switzerland. Globally, UBS competes with the world’s largest investment banks, especially with the Bulge Bracket, and is regularly compare itself with its counterpart Swiss banking giant called Credit Suisse. According to a study done by the Coalition Research Institute, and published in 2018, UBS was in the top 10 largest investment banks in the world. Let’s see what other banks are UBS’s strongest competitors from all over the world:

  • From Europe: the company competes with a few larger banks such as HSBC, Deutsche Bank, Crédit Agricole, Natixis, Royal Bank of Scotland, UniCredit and Santander.
  • From Switzerland: in the local area UBS is in a stronger competition with a number of cantonal banks like Zürcher Kantonalbank, Banque Cantonale Vaudoise and other banks, like Raiffeisen, Migros Bank and PostFinance .
  • From United States: UBS is so sure in its high quality that also competes with some major US banks such as Morgan Stanley, Citigroup, Goldman Sachs, Bank of America and JPMorgan Chase.

Increasingly, boutique operators are taking business away from banks.

Digital banks and advisory firms are taking a bigger market share in relation to the banks, as time goes on.

Conclusion

UBS isn’t the worst private bank in the world. There are far worst options.

However, they aren’t the best option for expats, let alone for anybody else looking for wealth management advice. They are largely trading on brand name and size.

They do offer some good corporate solutions, but don’t have many unique value propositions for individual investors.

Further Reading

What’s the best investment option for expats in the market?

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