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UBS Changes Advisory Fee Calculation to Provide More Transparency

October 5, 2020

UBS has moved to an average daily balance methodology for calculating its advisory fees, according to news reports.

Previously, the firm calculated account fees on a quarterly basis at the start of the quarter, and then modified them at the end of the quarter taking into account contributions and withdrawals that occurred in the preceding three months, FA-IQ sister publication FundFire writes, citing a UBS memo.

To calculate this year’s fourth-quarter fees, UBS will use the average daily balance, write Jason Chandler, head of wealth management in the U.S. at UBS, and Steve Mattus, head of advisory and planning products for the Americas, according to FundFire.

The change “reinforces our ongoing commitment to provide a high level of accuracy and transparency in all our methodologies,” Chandler and Mattus write, according to the publication.

Large wealth management practices have been tweaking their billing methodology as well in recent years. 

Morgan Stanley moved from a quarterly to a monthly billing cycle in May 2019, in what the wirehouse said would bring “more clarity, simplicity and consistency as the balance on their monthly statements will directly align with the fee they are charged,” FundFire writes, citing Vince Lumia, head of field management, and Ben Huneke, head of the investment solutions group at Morgan Stanley Wealth Management.

 Ameriprise changed billing cycles for clients on some of its wrap programs in April 2019 in a bid to “further streamline and simplify billing across our various platforms, providing more consistency for clients,” an Ameriprise spokesperson told FA-IQ sister publication Ignites at the time, according to FundFire.

Do you have a news tip you’d like to share with FA-IQ? Email us at editorial@financialadvisoriq.com

By Alex Padalka
  • To read the FundFire article cited in this story, click here if you have a paid subscription.
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Tags:  Fees and compensation , Morgan Stanley , UBS , Ameriprise

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