Union Bancaire Privée Review

Hello for all. I just found this forum. I am not a Switzerland or European Union resident or citizen. 

I want to open a bank account in union bank Privée, Switzerland . Anyone has experiences with this bank? They offered me to set up account with these fees below:

Advisory fees 0.20%
Account fees 2000 CHF
Admin fees 0.30%

My total investment is 3000000 USD.

I wonder if these fees are fair? I have no experiences with any Swiss bank before. Many thanks. 

Good day

Difficult to judge, as it is unclear what these fees mean. And in addition, there may be other fees that you do not list. Are the mandate fees already mentioned?

This would bring your total fee at UBP down to 0.5% per year, with 0.2% + 0.3%. This does not sound very expensive (at least in comparison to other Swiss banks). 

Flat fee: In Swiss banks, this fee can easily amount to 1% or more for asset management. However, there are also cheaper robo advisors (digital asset managers) with flat-rate fees of 0.5% per year.

However, the account fees seem to be expensive at 2000 francs. Are they charged for a residence outside of Switzerland?

It is also important to know which fees are added. Product fees, transaction fees, custody fees, foreign currency fees... etc. 

Product fees - e.g. for funds - are almost always added. If you buy expensive funds, the bank also earns money. It is best to buy only cheap ETFs.

Hello. Many thanks for your answer. 

- What does mandate fees mean? UBP didn’t mention it. 

- I will talk with the bank about the 2000 CHF account fees. I don’t know if they charge it from every clients or not. I have no experience with a Swiss bank before. Normally how much is the account fee I am expected to pay?

- Custody fees of any kind of securities are included in the administration fee, which is 0.30%.
My banker told me I will not pay any other custody fees for securities I have such as ETFs, bonds, stocks, funds etc. I hope I understood it correctly. I will double check it.

- Transaction fees: 35 CHF per transaction. Is it normal?

- What you mean by “foreign currency fees”? My banker told me I can open almost all kind of foreign currency accounts free of charge because fees are already included in the 2000 CHF account fee.  So if I have a gbp, euro, usd or other foreign currency account, they will not charge for it. This is what has been told me by my banker.  Did I understand it correctly or do they still charge for foreign accounts?

- I mostly buy bonds from banks. OTC market. I use my interactive brokers account to buy ETF. It is almost free. So the bond transaction fee is 0.30% and the ETF fee 1%.

 

Normally, the account fees are much lower for Swiss residents. For residents outside of Switzerland, there often is an additional fee of several hundred Swiss francs per year.

Transaction fee of CHF 35: Sounds normal, but there are cheaper solutions with online brokers.

Foreign currency fees: If you buy a share or fund in a foreign currency, there most certainly are "hidden" currency costs. Exception: If you have an account in the same currency.

If you have already an Interactive broker account, why open another one? 

In asset/wealth management, there are mandates. If you buy bonds etc. by yourself: why is there an advisory fee?

It really depends what you want. If you have the know-how and time to manage your own investments, then just using a broker like IB obviously works out a whole lot cheaper. If you want to have your money in Switzerland, then you could also take a look at Swiss brokers. Unlike IB, Swiss stock brokers are generally licensed Swiss banks.

If you don't have the time or know-how to manage your investments then paying for an asset manager can make sense. UBP provides asset management services. They manage your investment portfolio for you so you really don't have to give it much thought. Naturally, you pay fees for this service. If you are willing to pay to have someone manage your investments for you, then you could compare the UPB offer with the asset management services offered by Swiss retail banks. I know Swissquote, for example, has a robo advisor which is available to non-residents.

UBP focuses more on bespoke solutions, so you are more likely to get support tailored to your situation (i.e. legal and compliance consultation, etc.). It's a family-run bank with a reputation for conservative investments and legal compliance. I have a friend who works there. I can't fault it. But obviously costs are a big part of the bottom line.

I have an Interactive Broker account and use it for ETFs and stocks. But I also need a bank account to keep my cash and my bonds. So I decided to open an account in Switzerland. 

The bank told me that advisory fees are compulsory and this is required to give me investment ideas. This fee is not optional, according to my banker. There is no such fees in other banks? 

 

Well, you are paying asset management/financial advisory fees just to have a bank account. That isn't unusual as many Swiss banks only accept new non-resident customers who subscribe to asset management.

Also, the 0.5% plus 2k (0.067%) per year of fees doesn't seem excessive for 3 million dollars, as far as Swiss asset management fees go. According to my calculations the total cost would be just north of 17,000 dollars per annum, which is less than the cheapest option for a 0% stock portfolio from Swiss retail banks (according to the asset management comparison here on moneyland).

If you plan to hold your cash in Swiss francs, check into whether UBP has negative interest for account balances. That shouldn't be a problem if you just use dollar accounts.

Lastly, if your main goal is to hold cash and bonds in Switzerland, consider using a Swiss broker which is a licensed bank. I know that Swissquote does not charge non-resident fees, and offers credit cards linked to your brokerage account so it semi works as a bank account. The account isn't ideal for regular transactions and transfers though, and they charge negative interest for Swiss franc cash balances over 1 million francs. But may be a cheap alternative.