UBS IRA Review
UBS Roth IRA and Traditional IRA Review. UBS IRA
fees and rates for 2024. Is UBS IRA a good and safe way to invest?
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Opening UBS IRA Account
To the UBS account holder, opening of a UBS IRA is easy. All it takes is a call to the Financial Advisor and the client will be mailed out forms that have been filled out by the Client Advisor Associate. All of the account holder’s investing goals are known by the Financial Advisor, along with vitals, address, SSN, investment experience, etc. After the forms are signed and mailed back, the initial deposit can be made.
After the initial deposit is made into the IRA account, subsequent deposits can be added to the account by mailing in a check or the transfer of funds from the client’s UBS brokerage account to the IRA.
For those of us who receive income in irregular amounts and at irregular times (such as the self employed) calling the Financial Advisor to deposit the usual 10% of earnings can become quite tedious for both the client and the Financial Advisor. The deposit process can be smoothed over if the client sets up Electronic Account Transfer between his UBS brokerage account and his IRA. This way, the client can add funds to the IRA whenever he would like with the UBS website.
The Costs of Securities Purchases in UBS IRAs
Equity purchases in the IRA are extremely expensive. For example, a buy of 200 shares of the ETF XLF (Financial Select Sector SPDR) for the amount of $3,500
costs $68, and the sale costs the same.
Mutual fund purchases are much more affordable, with purchases of $250 or more at any one time costing $5.25. Purchases of $50 or less into a mutual fund
will cost the client nothing.
First Class Financial Advisors
As with a UBS brokerage account, all securities purchases must be done by calling the client’s Financial Advisor (or Client Service Associate) discussing the suitability of the security as it relates to the client’s overall investment plan, and then the Financial Advisor placing the trade.
For those who enjoy or would rather place their own trades on a laptop, iPad, or iPhone, UBS is NOT the right place. The internet trading option is not available to account holders. At the same time, calling the Financial Advisor for each trade can be quite the experience. A call to a UBS Financial Advisor serves to remind the account holder that UBS is a Wealth Advisor and UBS Financial Advisors specialize in giving a certain conservative yet sophisticated investment advice. The overall feeling is that of being in the First Class cabin on an overseas flight to Zurich.
Business IRA can be Problematic and Complex
If the UBS account holder owns a business, he can also open up a SIMPLE IRA or SEP IRA to put even more money away for retirement. SIMPLE IRAs are easy to
set up, with the forms filled out by the Financial Advisor as with the Traditional IRA. Funding the SIMPLE IRA is difficult. Each time the client wishes
to make a deposit, he must call the Financial Advisor or Client Service Associate to have the cash moved into the SIMPLE IRA. The client has the choice to have the deposit classified as a “Salary Reduction” or an “Employer Contribution.”
Due to the current IRS tax code, a business owner is required to contribute 2% of the salary of each of his employees per year. In addition to this 2%, each employee can contribute up to $12,500 or the 100% of his salary into the SIMPLE IRA (whichever is lesser.) Because of the 2% rule, it is important that the deposits be coded “Employer Contribution” when in fact they are to be use for this purpose. While clients are very clear to the intent of each contribution, Client Service Associates often times make the mistake of coding the contribution the wrong way, resulting in the code of “Salary Reduction” on the deposit. While this may not be a problem once in a while, it could cause an issue to those who are just getting the full 2% “Employer Contribution” and not “Salary Reduction” contributions.
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UBS IRA Annual Fees
Finally, UBS charges its account holders $75 for each IRA. This means that those with a Rollover IRA, a SIMPLE IRA, and a Traditional IRA will be charged
3x$75 = $225 per year in account maintenance fees. Account holders with a long term relationship with their Financial Advisors might enjoy the Financial Advisor waiving part or all of these fees from year to year.
UBS IRA Review Conclusion
If you don't want to pay UBS' sky-high fees, there are a lot of excellent options available from discount brokerage companies like
Charles Schwab.
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