April 11, 2011 / 7:34 PM / 8 years ago

UPDATE 2-Former UBS exec Black starts consulting firm

* Former UBS exec Black starts SpringReef Partners

* Wants to help rich clients find right adviser

* Black was COO of UBS’s private wealth division (Adds details on performance reviews )

By Helen Kearney

NEW YORK, April 11 (Reuters) - Douglas Black, a former executive at UBS Wealth Management Americas, has started a consulting firm to help rich families and organizations choose financial advisers.

Short Hills, New Jersey-based SpringReef Partners LLC will help clients pick advisers and negotiate fees, as well as monitor the advisers’ financial performance, the company said on Monday.

In an interview, Black, a 30-year industry veteran, said he believes there are great financial advisers working in a variety of different firms and business models.

“The problem is that this is a sales industry,” said Black. “It’s difficult for an individual who hasn’t been in the industry to distinguish between a great adviser and a good salesman.”

SpringReef has estimated that fewer than 20 percent of the 300,000 advisers in the United States have the ability to properly advise wealthy clients.

Black was previously the chief operating officer of UBS’s private wealth management division in the Americas, which caters to clients with at least $10 million of investable assets.

Following the arrival of current UBS Wealth Americas boss Robert McCann, Black was replaced as COO by Frank Minerva in March 2010. He left the firm later that month.

Black spent 21 years at UBS AG UBSN.VX (UBS.N) and predecessor firms PaineWebber and Kidder Peabody.

This new venture will target clients with between $5 million and $50 million in assets and help them choose advisers or evaluate their existing advisers.

A client can pay a one-time fee of $10,000 to find a new adviser or an annual fee of between 0.1 percent and 0.2 percent of their assets under management for ongoing evaluation of their advisers, said Black.

One of the key areas on which SpringReef will focus is the price that an adviser charges clients for various products and services.

“Pricing is an issue that is all over the map,” said Black. “I have a good feeling about where pricing should be so it’s fair and reasonable for the client,” said Black.

He will also sit with clients during their quarterly reviews with their advisers and follow up with the advisers to make sure they deliver what they promise in terms of reporting and service.

“I can ask the hard questions and hold advisers to their commitments,” said Black. “Often clients don’t feel comfortable doing that.”

In assessing new advisers, Black said he conducts extensive due diligence on both the firm and the adviser. When evaluating an adviser he looks at factors such as years of experience, compliance, employment stability and transparency of potential pricing.

“Great advisers love us because they think they will be the beneficiaries of our work,” said Black. “Less talented advisers don’t like us so much.” (Reporting by Helen Kearney, editing by Dave Zimmerman and Gerald E. McCormick)

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