Am I better off with Wachovia Securites or should I jump ship to UBS?

August 11, 2008 11:12 AM

A.G. Edwards / Wachovia Securities vs. UBS. Which is the way to go?

For the last 7 years, I have had an account with AG Edwards (now Wachovia Securites).... All of my 401k's, Roth IRA's, and future retirement accounts...I am satisfied with the performance of my portfolio during the good times, and not thinking of jumping off a ledge while the economy is being really rocky right now either....

My agent has recently resigned from Wachovia / AG and moved on over to UBS, and is trying to get me to come over with him... He mentions with the instability of the banks and what not, UBS provides a more secure foundation for my money and interests, than Wachovia can....

(mind you, I am not an expert in any of this, and a lot of what he tells me is french to my ears.)

I like the guy...He is easy to get a hold of... Responds to my questions and needs efficiently. He is the 4th guy I who has been my agent since I started my account back in 2001.

So, I am questioning whether to transfer over my accounts to him and UBS. He said that UBS will pay all transfer fee's and credit my account should I be hit with any kind of penalties.... He said that the fee's will most likely remain the same as they are currently....

Is UBS a better place to have my money? With all the uncertainty going on with banks and such, should i not be associated withthe likes of a Wachovia?

OR, do you guys feel that this guy is just looking to build up his portfolio and business with his new bosses, and is not really having my best interests at heart...

My basic question is, in the long run, is my money better suited staying put with Wachovia Securities or should I jum,p ship to UBS (www.ubs.com)?

Your thoughts and advice are welcomed! thx.

posted by TwilightKid to work & money (11 comments total)

I like the guy...He is easy to get a hold of... Responds to my questions and needs efficiently.

That's waymore important than any differences between UBS and Wachovia.
posted by Perplexity at 11:20 AM on August 11, 2008 [1 favorite]

Even if Wachovia (or UBS) "fails" (really, goes bankruput, which is unlikely), your 401ks, IRAs, retirement accounts and other investment accounts won't be affected, since you own them. Brokerage accounts are different from bank deposits, which you could lose if your bank fails and you have portions that aren't insured by FDIC or other depositor insurance. If your brokerage fails, you get to keep all of the investments that you own.

So, balance the fact that you like the guy and that you have been happy with him with the fact that he is lying to you to get you to move. It seems a reasonable request for him to say "hey, you like me, right, so why don't we keep working together?" If he did that, I would say get the promises re: transfer and other fees in writing and go from there. However, since he's either clueless or lying to you, I would stay where you are.

You might also look a little more closely at how well you have been doing and the kinds of fees you have been charged.
posted by iknowizbirfmark at 11:27 AM on August 11, 2008

I agree with Perplexity.

Also, Wachovia is full of depressed, demoralized employees, now that way too many of their coworkers have been laid off.

I don't know anything about UBS's employement situation.
posted by small_ruminant at 11:29 AM on August 11, 2008

Definitely...That will definitely play a role in my final decision....But the safety of my $$ now as well as for the next 25 years is slightly bigger....

I have always received quality attention while with AG Edwards, but may be willing to compromise somewhat to protect should Wachovia be the unstable institution with my money for the future.
posted by TwilightKid at 11:30 AM on August 11, 2008

To follow up a little bit, you should learn about the protection afforded you by the SIPC. I think that concerns about Wachovia failing are an exceedingly poor reason to move your money to a different broker.

It doesn't seem at all unreasonable that your broker wants you to move your accounts with him for other reasons, but the Wachovia faiing reason is bullshit.
posted by iknowizbirfmark at 11:35 AM on August 11, 2008

UBS isn't exactly all roses and sunshine, either. They've been as badly hammered as anyone by the home loan crisis.

Anyway, speaking as the relative of a broker who made such a move, I'll say that he did it in large part predicated on the idea that he'd be able to bring most of his clients with him. He'll actually be in really hot water if too many of his clients (or, more accurately, too much of the money that he previously managed at the old house) don't follow him. Given that, it doesn't surprise me that he's willing to say anything to get you to come over with him.

The question you have to answer is, will you and up making more money by following your broker/agent, or by staying around with a new agent? If you feel that this guy got you into investments that made you good money, and you wouldn't have made that money without his help, then stay with him. If your bottom line would be the same either way, then don't bother with the move.
posted by Citrus at 11:42 AM on August 11, 2008

I'm with UBS and have been happy, but that's because I like my adviser. However, I have an actively managed portfolio there, half in an IRA, half in regular accounts. I'd follow him anywhere, unless the rate structure changed so much that it was costing me more than I thought he was worth.
posted by dpx.mfx at 12:05 PM on August 11, 2008

IANYB (I am not your broker) Most major brokerage firms have several layers of insurance on their accounts over and above anything that SIPC provides. This shouldn't be an issue. Ask each firm for documentation on what insurance they provide to their account holders

Know that advisors are usually cut a check (structured as a loan which is forgiven over a set number of years) to change firms, in exchange for bringing their clients to a new firm. Your advisor most likely expects you to come with him. Your advisor has taken a significant risk to his income in changing firms. The question you must ask yourself is, with who do I have the relationship, the firm or the advisor? In my personal experience those who have the latter tend to have a more rewarding experience, but then I'm probably biased.

This is a great opportunity to renegotiate fees, with whatever firm you decide to go with. You shouldn't be paying more than 1.5% for any fee-based accounts. Make sure you FULLY understand in what manner you are being charged, and how much. Make sure that the services you receive are justifying these fees.

A.G.Wachovia is likely going to have some major issues merging the two platforms, but that probably won't affect you as a client. UBS has already gone through this process when they absorbed Paine Webber. Know that UBS has taking some major hits, not just from subprime, but also ethically 1. in the manner that they were selling auction rate securities to clients and 2. in the private bank where there have indictments of former bankers for tax avoidance schemes. As I understand it UBS has instructed at least some of its private bankers to stay out of the US to avoid being detained.

That said, none of the above issues will likely affect you as a retail client. Ultimately who do you trust more, your advisor or your firm?
posted by leotrotsky at 12:32 PM on August 11, 2008

He said that the fee's will most likely remain the same as they are currently.

If it were me, I would stay put until my broker could give me a straight answer about exactly how the fees at UBS stack up against Wachovia. The only reasons he could have for telling you what the fees will "likely" do rather than what the fees will *actually* do are (1) he's not sure, because he hasn't really looked into it enough (in which case he really shouldn't be advising you to move brokerages, because he doesn't know whether it will make you better or worse off), or (2) he knows that the fees at UBS are slightly or significantly higher, and is using weasel-words to try to glide over that fact in an attempt to convince you to move with him.

Neither one of those cases would inspire a whole lot of confidence in me, but obviously you have a lot more experience with this guy and can make a better judgment.
posted by iminurmefi at 12:34 PM on August 11, 2008

You have answered your question. If you like and trust your agent, then maintain the relationship! Fundamentally, there is no difference in what company holds your investments (assuming both are going go maintain solvent) - just make sure you are clear on what change in the fees will be. Also ask how your agent's pay will change because of this.
posted by yoyoceramic at 4:42 PM on August 11, 2008

UBS' financial health is not very good right now. So if that's your decision-making criteria, take this info into account.
posted by ikkyu2 at 8:13 AM on August 12, 2008