One of the most irritating things about having an account with one of the “big box” firms is that they charge you a fee just for having an account. This is before your pay their exorbitant commissions and management fees, the loads on their mutual funds, or the markups on their bonds.
The latest insult to advisory clients is UBS Wealth Management’s decision to raise their account fees. Individuals with less than $2 million in their accounts will now pay $175 per account per year, up from $150 previously, and more than double the $75 account fee UBS currently charges for each IRA you have open with them.
The major firms like UBS and Merrill Lynch are practically incentivizing investors who have less than quarter-million in assets with them to go take their money and go somewhere else. If you have less than $250,000 at Merrill Lynch, your broker does not get paid on your account. All the fees and commissions you pay go only to mother Merrill, and the advisor gets none of it. Can you imagine how interested he or she is in actually providing you the service you deserve?
When we formed our independent Registered Investment Advisor in 2010, we chose Charles Schwab as our custodian. Part of the reason we choose to custody our clients money with Schwab was the excellent service they provide to both us and our clients, and part of the reason was because they have always focused on driving down costs related to investing. Today, they still do not change account fees, they offer all the services that the “big box” guys do, and they work for us as opposed to us working for them, allowing us to focus on providing our clients our best possible investment advice.
Arie J. Korving, a CERTIFIED FINANCIAL PLANNER™ professional, has been delivering customized wealth management solutions to his clients for more than three decades. Prior to co-founding Korving & Company, he was First Vice President with UBS Wealth Management and held management positions with General Electric.