UBS makes play for the retail market
Wholesale fund manager UBS Asset Management (UBSAM) has made a defacto entrance into the retail market by lowering the minimum entry figure for access to its funds and introducing a dial-up trailing commission.
Wholesale fund manager UBS Asset Management (UBSAM) has made a defacto entrance into the retail market by lowering the minimum entry figure for access to its funds and introducing a dial-up trailing commission.
The entry figure will drop from $50,000 to $20,000 in a bid to attract more investors while the dial-up commission will range from nil to one per cent, set by financial planners and their clients.
UBSAM chief executive officer John Larum says the move aims to capitalise on the group’s distribution presence in the master trust channel.
"We are traditionally known as a fixed income wholesale manager but we have always had a managed funds presence via master trusts," he says.
"As such we are devoting more resources to build up our profile among financial planners with a good range of products which are attractive for use by planners."
Larum says the entry point of $50,000 represented a barrier for many investors. He believes the new lower entry point has the potential to widen the client base through the advisory market.
UBSAM business development director Colin Wood says the group does not wish to impose a trailing commission rate upon planners hence the variable rate which will tie into its wholesale MER rates.
"This is a genuine wholesale rate between 0.4 per cent and 0.78 per cent dependent on sectors,” Woods says. “As such, advisers can see what is going on and it provides a level of flexibility with clients.
"Even at the highest rate of one per cent added to the maximum management fees the overall rate will still be lower than the market average.
"We have had much of our growth through the master trust and wrap account markets and DIY superannuation. The use of this form of dial-up commission gives us the chance to use this type of product, with remuneration built in, outside this environment," Woods says.
The changes are being rolled out to coincide with the local operations of UBS Brinson being rebadged to UBSAM.
Globally the group has $550 billion under management, of which $190 billion is in managed funds. Australian operations account for $12.4 billion with around 60 per cent tied up in fixed income and cash.
The balance of the funds are in local and international equities, international fixed income and private markets. The group is targeting a further $1 billion into retail funds over the next two years.
AUTHOR
Jason Spits
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
