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Thoughts on UBS for wealth management?

2,455 Views | 22 Replies | Last: 6 yr ago by Football&Finance
O'Doyle Rules
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AG
My mother and father got divorced and my mom's attorney told her he was happy with UBS managing his money. She went with them but I'm curious about this boards opinion. I also just googled "UBS fiduciary" and it looks like they are NOT fiduciary but may be forced to switch into it somewhat with this new rule coming up. Thoughts? TIA...I would rather my mom not lose her $ so a crooked salesman can hit his commission goals.
libertyag
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AG
Just don't give them, or anyone else, discretionary trading authority for the account.
neutics
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AG
Fee-only is the only true fiduciary. Do you think she needs one-time (hourly) or ongoing (AUM) assistance?

For hourly, the Garrett Planning Network is a good place to start to search by location.

Or, www.napfa.org is the best place to find a fee-only advisor. You just might find my firm on there :-)


Long story short, your inclination is correct on UBS. No broker-dealer is really a fiduciary as they are incentivized (and often restricted) to push certain products. Sure, the new fiduciary rule will help curb some of the abuses but there is still no substitute for an advisor who acts with your best interests in mind.
nactownag
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AG
At the end of the day, it really comes down to who the advisor is. What's their knowledge level and credentials? Are they honest and do they have integrity?

Because I can tell you I've seen plenty of RIA fiduciaries that completely screw their clients.

So I don't think it's really fair to say all broker dealers are bad and all RIAs are great.

I agree that fee only is the best way to do things these days. Hopefully the fee is reasonable (1% or close to it)
Football&Finance
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AG
If your mother is a sophisticated, HNW investor, UBS has an excellent platform that provides access to a ton of products and services.

Judging from your post, I doubt this is the case. I think your mother would benefit from meeting with a planner first to assess post-divorce financial situation and goals, then armed with that advice, seek the optimal investment vehicle to achieve those goals.

TL;DR seek planning separate from investment advice first, then select efficient vehicle to invest
Harkrider 93
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AG
libertyag said:

Just don't give them, or anyone else, discretionary trading authority for the account.
For clarification, I think libertyag is saying that UBS (and others) offer hedge funds. Most, if not all, of these hedge funds have discretionary trading authority. It is the same authority that gave Madoff and Stanford the ability to steal money.

Even if he isn't, my clarification is something to watch out for.
Football&Finance
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AG
it's not discretionary trading authority that allows for ponzi fraud. It's when you don't custody the assets and have visibility into the trades and returns.

To be clear, sending assets to a fund (whether it be PE/VC/HF) is standard practice and, frankly, there's no way around it for PE/VC and certain HF strategies. This is why SMAs and UMAs (accounts on your adviser's platform that allow the external manager to trade them, while you and your adviser retain custody) have become more popular in the wake of Madoff/Stanford. That, and they're more efficient for the individual investor.
ebdb_bnb
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Harkrider 93 said:

libertyag said:

Just don't give them, or anyone else, discretionary trading authority for the account.
For clarification, I think libertyag is saying that UBS (and others) offer hedge funds. Most, if not all, of these hedge funds have discretionary trading authority. It is the same authority that gave Madoff and Stanford the ability to steal money.

Even if he isn't, my clarification is something to watch out for.
Discretionary trading authority had zero to do with Madoff and Stanford.
Harkrider 93
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AG
I am probably using the word loosely or inaccurately. They had discretion to commingle the funds. Maybe permission or right to commingle is the proper way to say it. Once all the money gets mixed up and the person controlling the account can move it in and out into anywhere (including their own account), you have an easy way to begin the process.

ebdb_bnb
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According to FINRA:

"Discretion" in this context refers to discretionary trading, which is when a broker makes trades in a customer's account without first consulting the customer. That generally means the broker can decide at any time how much of a stock, bond or other security to buy or sell, and at what price, without customer input.

I'm more familiar with Madoff than Stanford, but Madoff self cleared. He didn't use Fidelity, TD, Schwab etc to clear his trades, which also meant he created his own statements and confirms. He was able to move money from customer accounts to firm accounts because no one knew what he was doing since he created the statements. If using an IA that doesn't self clear, that is a non issue.
Harkrider 93
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AG
thanks - I was referring more to the ability to commingle. Obviously, self clearing is another issue. I have heard about people remaking statements. They clear trades through Schwab, have the customer statements go by email to their own person email address, then mail out a false statement that looks almost identical to a Schwab statement. I realize the Madoff situation is way worse. I am just stating some other things I have seen.

I still thing the commingling is harder to track and monitor over discretional trading. Buying and selling isn't an issue to me, but moving money in and out of accounts that don't have to be registered in the owner's name is.

Self clearing and commingling can be deadly.
ATXAdvisor
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AG
If you ask about a broker in here, there are several regular posters who are brokers that will quickly chime in with biased answers. Yes, there are many good people that are brokers, but why would you willingly choose to do business with an entity that doesn't put their customer's interest first as part of their chosen business model? An independent fee-only advisor with credentials (CFP, CFA, CPA PFS) is your best bet for finding advice free of conflicts for the lowest cost. Just my biased opinion.

Disclosure - Am fee-only Registered Investment Advisor with CFP designation.
ebdb_bnb
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Conflict free advice doesn't exist, and if you are holding yourself out as such, the SEC will take issue with it when it comes across their radar. If you are being compensated, there is a conflict.
Stive
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AG
ebdb_bnb said:

Conflict free advice doesn't exist....... If you are being compensated, there is a conflict.

This.
Diggity
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AG
So your advice is biased too. Thanks for clarifying.
ATXAdvisor
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ebdb_bnb said:

Conflict free advice doesn't exist, and if you are holding yourself out as such, the SEC will take issue with it when it comes across their radar. If you are being compensated, there is a conflict.


I hold myself as being an independent fiduciary. My ADV is available on my website (in my profile), where you can see all of my conflicts spelled out in writing, as well as my fiduciary pledge.

Being a fiduciary means putting the client's interest first, by law. Brokers like UBS operate on a suitability standard that puts the company first, by law. They have also kicked and screamed as the DOL stepped in to require them to put customers' first when it comes to retirement money when FINRA and the SEC repeatedly shuffled the deck to deal back to the industry.

I'm an open book, the SEC or anyone else that is interested is welcome to examine me.
ATXAdvisor
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AG
And if you want to see what a legacy of screwing you customer looks like, read UBS's rap sheet.

http://www.corp-research.org/UBS
Stive
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AG
None of what you said changes the fact that if you get paid, philosophically, you have a conflict of interest. The fact that you've listed all of your affiliations doesn't change that fact.
ATXAdvisor
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AG
Stive said:

None of what you said changes the fact that if you get paid, philosophically, you have a conflict of interest. The fact that you've listed all of your affiliations doesn't change that fact.


Except all of mine are transparent. Pay my AUM fee, retainer, or hourly rate, and I am legally bound to work for your interests.

Brokers can pay variable compensation (I.e. More for one product over another), as well as incent salespeople (trips, bonuses, etc) all without required disclosure. And it's perfectly legal, albeit, becoming less so.

Like I said, most individual brokers are trying to right by their clients. It's the system that puts them in conflicts that fee based advisors don't face. There are turds everywhere, but a client that is wronged will have a much easier time showing breach of fiduciary duty versus proving a suitability issue.
ebdb_bnb
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Renegade by God said:

ebdb_bnb said:

Conflict free advice doesn't exist, and if you are holding yourself out as such, the SEC will take issue with it when it comes across their radar. If you are being compensated, there is a conflict.


I hold myself as being an independent fiduciary. My ADV is available on my website (in my profile), where you can see all of my conflicts spelled out in writing, as well as my fiduciary pledge.

Being a fiduciary means putting the client's interest first, by law. Brokers like UBS operate on a suitability standard that puts the company first, by law. They have also kicked and screamed as the DOL stepped in to require them to put customers' first when it comes to retirement money when FINRA and the SEC repeatedly shuffled the deck to deal back to the industry.

I'm an open book, the SEC or anyone else that is interested is welcome to examine me.
From first hand experience, I can tell you they are targeting RIAs that market themselves as conflict free. The fact you disclose your conflicts proves you aren't conflict free.
ATXAdvisor
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AG
Like I said, there are turds on all sides. Choosing from the one that offers the most transparency and protection provides a customer the best chance of conflict free advice. Can RIA's have conflicts? Sure, but the model reduces them and offers customers more assurance that lack of disclosure will have consequences. To say the conflicts are equivalent between the two models is intellectually dishonest, unless you are saying that profit motive = conflict.

That's more of a discussion for the Politics board
ebdb_bnb
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Renegade by God said:

Like I said, there are turds on all sides. Choosing from the one that offers the most transparency and protection provides a customer the best chance of conflict free advice. Can RIA's have conflicts? Sure, but the model reduces them and offers customers more assurance that lack of disclosure will have consequences. To say the conflicts are equivalent between the two models is intellectually dishonest, unless you are saying that profit motive = conflict.

That's more of a discussion for the Politics board
To be clear, I'm not advocating for one side or the other. I tend to agree with you, Fee only is the better of the two options if one chooses to work with an advisor.
investorAg83
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AG
Prefacing with the fact that I am an advisor, the problem with the majority of our industry these days, regardless of whether or not they're fee only, is that the vast majority of conversations are "You're getting x...we think we can get you x+1. So roll everything over and we'll call you in 6 months."

If your mom needs help, interview some advisors (how they advise their clients matters much more than who they are with) and see who you have the best conversation with.
Football&Finance
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AG
Things got kind of tense in here... can we go back to where harkrider inexplicably decided to die on the hill of "giving someone discretion over your account = Ponzi" ?
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