The Securities and Exchange Commission is expected to require greater disclosure of fees and payment arrangements by brokerage firms. UBS Wealth Management USA is one firm that is leading the pack by introducing such documents to its clients now, the Wall Street Journal reports.
Increased disclosure is one way that the brokerage firm can turn investor concerns about misdeeds into confidence, said Mark Sutton, chairman and CEO of UBS Wealth Management. "We're trying to anticipate client concerns in the future and vet them in advance," he said. "People read about and hear about [the issues brokerage firms are dealing with], and if we can address them proactively, that portrays the firm in a positive light."
UBS plans on revealing the exact compensation structures behind different investments and accounts as well as detailed explanations of the difference between discretionary and nondiscretionary accounts. The firm also details annual fees on an individual retirement account (IRA) and mutual fund and variable annuity sales commissions.
Morgan Stanley has already been using a similar document for over a year and has made an effort to use plain-English disclosures in certain client communications.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.