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UBS to Change Customers' Objectives, Reclassify Clients as "Aggressive" Investors

Imagine, you are at home and the mailman delivers a piece of mail from your brokerage firm. Upon opening it, you read that because you are a bond investor, your brokerage firm will now arbitrarily identify you as an "aggressive" investor. Even the most conservative bond investor will be reclassified unless he or she affirmatively objects.

According to a report from Fox Business, the brokerage arm of UBS will soon send letters to all of its clients arbitrarily changing their account objective to "aggressive" if they hold bonds.

Fox Business reports that some brokers at UBS believe the bullish bond market has "run its course." As a result, some of the firm's current customers with what UBS deems to be less conservative objectives may receive "non-consent letters" by March informing them that UBS has unilaterally changed their conservative investment objective classification(s) to that of "aggressive." It will be left to each individual investor to object to the reclassification.

Fox Business reports that other brokers at UBS are concerned that some of their best clients will react negatively to these changes and ultimately leave UBS for another firm.

Other UBS stockbrokers, meanwhile, further believe the surprise reclassification may be part of an attempt by UBS to lessen the firm's liability among clients holding bond positions by reclassifying these clients as "aggressive" and, therefore, willing to take on risk.

In securities arbitration, the contents of the new account documents, particularly the account objectives and risk tolerances are scrutinized by counsel and the arbitrators, particularly on claims involving the suitability of the investment. The classification or mis-classification of risk tolerances and account objectives may have a significant impact on a case.

In our opinion, a unilateral risk reclassification is little more than a bald-faced effort to stave off what it appears UBS believes will be the next major wave of arbitration claims - bond investments.

If you have invested with a firm you believe has improperly classified or changed your objectives based on your current holdings, and you feel such a move has adversely affected your financial interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

News: UBS Set to Classify Bond-Buying Clients as 'Aggressive' Investors (Fox Business)

Categories: UBS, Account Objectives, Bonds, Risk
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The Law Offices of Jonathan W. Evans & Associates - California Securities Fraud Attorney
Located at 12711 Ventura Boulevard, Suite #440 Studio City, CA 91604. View Map
Phone: (800) 699-1881 | Local Phone: (818) 760-9880.
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