Flat-fee contracts are paying dividends for UBS a year after these were introduced in Switzerland for its wealth management arm.

Wealthy clients of UBS put almost SFr13 billion (about $14 billion) into flat-fee advisory contracts introduced last year, helping to bolster revenue, the head of wealth management in Switzerland has reportedly said.

Clients in Switzerland, where the accounts began, put in about SFr5 billion since their inception, Christian Wiesendanger, who heads the wealth management business in the country, told Bloomberg.

That figure equates to about 3 per cent of the funds in the Swiss unit oversees.

“I’m extremely happy,” Wiesendanger, said of the take-up. “This is a fundamental shift in paradigm. It’s not just another investment fund. It’s a solution that aligns the client’s interests with the bank’s,” he is quoted as saying.

A spokesperson for UBS confirmed details of the report to WealthBriefing.

Switzerland’s largest bank said this offering, available in the country since May last year, gives clients clarity on fees while UBS obtains a steady, predictable revenue stream.

The offering, available in Switzerland since May 2013, gives clients transparency on fees and provides UBS predictable revenue at a time of fund outflows from undeclared accounts and a reluctance by customers to trade. For a flat fee, clients get services including automated daily checks of their investments against their risk profiles and UBS’s market views.

In July, UBS said fees generated more than offset the impact of client redemptions from undeclared accounts in the second quarter. With pressures remaining on Swiss banks over undeclared accounts, such regular revenues are welcomed.

Wealth management in Switzerland posted a 2 per cent increase in revenue in the first half from the previous year and an 8 per cent jump in pretax profit as the “work of transforming assets into contractual solutions pays off,” Wiesendanger told the news service.