Joseph Sofia

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.