Peter W. Rosenthal

The fees you pay depend on whether you choose brokerage services, advisory services or both. You will pay fees and costs regardless of whether you make or lose money on your investments. Fees and costs reduce the return on your investments. Fees and costs are described in detail in the Account and administrative fees section and in each of the investment product sections in Your Relationship with UBS at ubs.com/relationshipwithubs and the Form ADV at ubs.com/formadv.

Advisory services fees and costs

The primary fees and costs are generally “wrap” program fees. These fees are “asset-based,” meaning that the fee is calculated as a percentage of the assets in your advisory account (including uninvested cash held through a sweep program).

The more assets you invest in your account, the more you will pay in fees, and there is therefore an incentive to encourage you to increase your advisory account assets.

The wrap program fee you pay is for our investment advice, most trading costs, and custody and performance reporting, but does not include the investment management fee for a separate investment manager, which is additional. We will disclose these fees to you when you enroll. Not all separate investment managers charge an additional fee to clients.

The wrap program fee you pay will exceed the amount earned on the cash sweep balances in your account as well as any other assets that earn a lower rate than the wrap program fee.

If a separate investment manager uses a broker-dealer other than us to execute a trade (commonly referred to as a “step-out” trade), you will incur additional trading costs. If you custody assets or trade investments at a financial institution other than us, you will pay any additional fees that institution charges.

The wrap program fee is negotiable and is charged each quarter in advance. Learn more about our wrap program fee schedule and billing practices in your advisory agreement and our Wrap Fee Form ADV Brochure (Item 4 and Item 5.C) available at ubs.com/formadv.

Advisory accounts are not charged annual account maintenance fees.

Additional fees include:

• Amounts that are included in the expense ratios of certain investments such as mutual funds, ETFs and alternative investments

• Wire fees, transfer fees and bank charges

• Fees for margin

These fees are explained in the applicable prospectuses and offering documents for the particular investments.

Advisory financial planning services are subject to a fixed fee for developing and delivering a financial plan. We also offer consulting services that have minimum account requirements and are not typically used by individual wealth management clients. These consulting services are provided only by a select group of Financial Advisors having the title of “Institutional Consultant.” Fees for planning and consulting services are set forth in your agreement with us for these services.

Why is it important to understand fees and costs?
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
For additional information, please see Your Relationship with UBS at ubs.com/relationshipwithubs and the Form ADV at ubs.com/formadv.

When we provide you with a recommendation as your broker-dealer or act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours.

At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts, because they can affect the recommendations and investment advice we provide you. Here are some examples to help you understand what this means:

• Proprietary investments and services

  • Compensation: We earn higher fees, compensation and other benefits when you choose an investment that we (or one of our affiliates) advise, manage or sponsor, such as a mutual fund, alternative investment or structured note, or when you select us or an affiliate as the investment manager.

  • Incentive: There is an incentive to recommend or to invest your assets in investments and services that we advise, manage or sponsor over products from a third party.

• Third-party and affiliate payments

  • Compensation: We receive payments from third-party product sponsors and managers (or their affiliates) and from our affiliates when we recommend or sell certain products and services to our clients. These include sales charges, selling concessions and other indirect ways of compensating UBS.

  • Incentive: There is an incentive to recommend that you invest your assets in products and obtain services of third parties and/or our affiliates that pay us over other products and services that do not pay us, or pay us less.

• Revenue sharing

  • Compensation: We receive a share of revenue that managers and sponsors, including our affiliates, earn when you invest in their investment products (primarily mutual funds and variable annuities).

  • Incentive: There is an incentive to recommend (or to invest your assets in) products of sponsors and managers that share their revenue with us over other products of sponsors or managers that do not share their revenue, or who share less.

• Principal trading

  • Compensation: As principal, we buy securities from you or sell securities to you from our (or our affiliate’s) inventory. We typically earn compensation by marking up the price of the securities we sell to you or by marking down the price of the securities we buy from you.

  • Incentive: There is an incentive to trade with you on a principal basis and to recommend securities from our inventory.

• Sweep program for uninvested cash balances using an affiliated bank

  • Compensation: Uninvested cash in our sweep program is used to generate revenue for us and our affiliates. These cash balances earn a lower rate of return on that cash than might otherwise be obtained. We also charge the advisory fee on your uninvested cash balances in advisory accounts. The advisory fee exceeds the amount you will earn on those balances

  • Incentive: There is an incentive to maintain a program where uninvested cash is swept to our affiliate and to keep uninvested cash balances in advisory accounts.

We address our conflicts of interest by maintaining policies and procedures requiring that Financial Advisors act in your best interest, maintaining reasonable supervisory processes and disclosing these conflicts so that you can make fully informed decisions.

For additional information, please see the “Conflicts disclosure” section of Your Relationship with UBS at ubs.com/relationshipwithubs and the Form ADV at ubs.com/formadv.

Most of our Financial Advisors receive a percentage of the revenue that they generate from our services, which includes transaction-based fees, investment advisory fees, trails and referral fees. The percentage increases as the level of revenue a Financial Advisor generates for UBS increases (known as production).

Financial Advisors are also eligible to receive financial and recognition awards based on their:

• Production

• Length of service with UBS

Financial Advisors that move between financial institutions generally receive a significant amount of additional compensation as an incentive to move. At UBS, this additional compensation is based on a combination of the amount of the Financial Advisor’s annual revenue at the prior firm and the level of assets or accounts that transfer to UBS. Financial Advisors in the Wealth Advice Center are paid on a salary-plus-bonus structure. For additional information, see ubs.com/wacdisclosure.

We and our Financial Advisors also receive non-cash compensation from certain product sponsors that can include occasional gifts, meals, tickets and/or other entertainment, sponsorship of educational or training events, including educational events Financial Advisors arrange for clients and prospective clients.

The fees you pay depend on whether you choose brokerage services, advisory services or both. You will pay fees and costs regardless of whether you make or lose money on your investments. Fees and costs reduce the return on your investments. Fees and costs are described in detail in the Account and administrative fees section and in each of the investment product sections in Your Relationship with UBS at ubs.com/relationshipwithubs and the Form ADV at ubs.com/formadv.

Brokerage services fees and costs

The primary fees and costs are “transaction-based fees,” meaning they are charged each time you buy or sell an investment. Depending on the investment you select, these fees can include:

• Up-front commissions (which our Financial Advisors are permitted to discount)

• Additional fees include:

  • Annual account maintenance fees

  • Administrative fees such as processing and handling fees for trades, wire fees, transfer fees and bank charges

  • Fees for margin

  • Other amounts that are included in the expense ratios of certain investments such as mutual funds, ETFs, variable annuities and alternative investments

  • In certain circumstances, “surrender charges” if you sell an investment before a specified period

Because we are compensated for transactions, there is an incentive to encourage you to trade more frequently and in greater amounts. We also have an incentive to trade with you as principal and recommend securities from our inventory, because we earn compensation by marking up the price of the securities we sell to you or by paying you less for the securities we buy from you.

This compensation is described in the “Fees and Charges” and the “Statement of Credit Practices” sections of our Agreements and Disclosures, which can be found under the Account agreements and disclosures tab at ubs.com/disclosuredocuments. Additional fees and costs are described in Part two of Your Relationship with UBS at ubs.com/relationshipwithubs.

Why is it important to understand fees and costs?
You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying.
For additional information, please see Your Relationship with UBS at ubs.com/relationshipwithubs and the Form ADV at ubs.com/formadv.

When we provide you with a recommendation as your broker-dealer or act as your investment adviser, we have to act in your best interest and not put our interest ahead of yours.

At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts, because they can affect the recommendations and investment advice we provide you. Here are some examples to help you understand what this means:

• Proprietary investments and services

  • Compensation: We earn higher fees, compensation and other benefits when you choose an investment that we (or one of our affiliates) advise, manage or sponsor, such as a mutual fund, alternative investment or structured note, or when you select us or an affiliate as the investment manager.

  • Incentive: There is an incentive to recommend or to invest your assets in investments and services that we advise, manage or sponsor over products from a third party.

• Third-party and affiliate payments

  • Compensation: We receive payments from third-party product sponsors and managers (or their affiliates) and from our affiliates when we recommend or sell certain products and services to our clients. These include sales charges, selling concessions and other indirect ways of compensating UBS.

  • Incentive: There is an incentive to recommend that you invest your assets in products and obtain services of third parties and/or our affiliates that pay us over other products and services that do not pay us, or pay us less.

• Revenue sharing

  • Compensation: We receive a share of revenue that managers and sponsors, including our affiliates, earn when you invest in their investment products (primarily mutual funds and variable annuities).

  • Incentive: There is an incentive to recommend (or to invest your assets in) products of sponsors and managers that share their revenue with us over other products of sponsors or managers that do not share their revenue, or who share less.

• Principal trading

  • Compensation: As principal, we buy securities from you or sell securities to you from our (or our affiliate’s) inventory. We typically earn compensation by marking up the price of the securities we sell to you or by marking down the price of the securities we buy from you.

  • Incentive: There is an incentive to trade with you on a principal basis and to recommend securities from our inventory.

• Sweep program for uninvested cash balances using an affiliated bank

  • Compensation: Uninvested cash in our sweep program is used to generate revenue for us and our affiliates. These cash balances earn a lower rate of return on that cash than might otherwise be obtained. We also charge the advisory fee on your uninvested cash balances in advisory accounts. The advisory fee exceeds the amount you will earn on those balances

  • Incentive: There is an incentive to maintain a program where uninvested cash is swept to our affiliate and to keep uninvested cash balances in advisory accounts.

We address our conflicts of interest by maintaining policies and procedures requiring that Financial Advisors act in your best interest, maintaining reasonable supervisory processes and disclosing these conflicts so that you can make fully informed decisions.

For additional information, please see the “Conflicts disclosure” section of Your Relationship with UBS at ubs.com/relationshipwithubs and the Form ADV at ubs.com/formadv.

Most of our Financial Advisors receive a percentage of the revenue that they generate from our services, which includes transaction-based fees, investment advisory fees, trails and referral fees. The percentage increases as the level of revenue a Financial Advisor generates for UBS increases (known as production).

Financial Advisors are also eligible to receive financial and recognition awards based on their:

• Production

• Length of service with UBS

Financial Advisors that move between financial institutions generally receive a significant amount of additional compensation as an incentive to move. At UBS, this additional compensation is based on a combination of the amount of the Financial Advisor’s annual revenue at the prior firm and the level of assets or accounts that transfer to UBS. Financial Advisors in the Wealth Advice Center are paid on a salary-plus-bonus structure. For additional information, see ubs.com/wacdisclosure.

We and our Financial Advisors also receive non-cash compensation from certain product sponsors that can include occasional gifts, meals, tickets and/or other entertainment, sponsorship of educational or training events, including educational events Financial Advisors arrange for clients and prospective clients.