This Is What Swiss Asset Management Costs

Swiss banks put a lot of effort into attracting customers to their asset management services, and the moneyland.ch asset management comparison explains why. Traditional asset management with personal consultation has its price.

For this year’s study, moneyland.ch examined the costs of Swiss asset management and investment advisory services for three different investment portfolios and amounts.

The results show that Swiss asset management services are generally expensive. But there are big cost differences between banks. “Anyone looking for an asset manager should first compare the fees,” says Benjamin Manz, CEO of online comparison service moneyland.ch.

High flat fees

Investing 250,000 francs in a stock-only portfolio with a traditional asset management service costs 3425 francs per year, on average, at the Swiss banks included in the study. That translates into 1.37 percent of the assets under management. Additionally, there are also other costs that are not accounted for in asset management fees, including currency exchange costs, taxes, stock exchange fees, and fees charged by investment funds used. The fees charged by funds, in particular, can be just as high as the asset management fees.

Online asset management services are cheaper, with the average cost being less than half of that of traditional asset management services, as a recent moneyland.ch study shows.

The larger the stock component, the higher the asset management fees

Many banks base their asset management fees on the size of your portfolio’s stock component. An asset management mandate for 1 million francs that uses a stock portfolio (80 to 100 percent stocks) costs an average of 13,529 francs – around 1.35 percent of the assets under management – each year. For a portfolio with a stock component of between 40 and 60 percent, the average annual asset management fee is 1.24 percent. For a portfolio with no stocks at all, the average fee is 1 percent per annum.

The cheapest conventional asset management services

There are big differences in the flat fees charged across the different asset management services included in the study (see tables 1, 2, and 3). The Sparkasse Schwyz has the lowest fees, with the next cheapest banks varying depending on the sizes and makeups of investment portfolios.

A client with 1 million francs of assets to invest and a stock-only portfolio will pay 6500 francs per year to use the ETF mandate from Sparkasse Schwyz. The asset management service from the Basellandschaftlichen Kantonalbank takes second place for this profile, with 10,000 francs of asset management fees per year. Bank Cler and Migros Bank both share third place, with costs of 11,000 francs per year. The most expensive option for this profile is the All Instruments mandate from Credit Suisse, for which the client would pay 19,500 francs per year – three times more than the cheapest conventional asset management service for this profile.

The cheapest investment advisory service

Many banks offer both asset management and investment advisory services. Investment advisory clients receive investment recommendations from the bank, and can choose whether or not to follow this advice. Asset management clients, on the other hand, give the bank the authority to invest for them.

The cost of investment advisory for a stock portfolio worth 500,000 francs is lowest at Sparkasse Schwyz, with fees of 1500 francs per year. It is followed by the Uno mandate from the Basellandschaftlichen Kantonalbank with fees of 1750 francs per year, and the Invest Compact mandate from Credit Suisse, with fees of 2500 francs per year.

Table 1: Asset management fees for a portfolio worth 250,000 francs

Table 2: Asset management fees for a portfolio worth 500,000 francs

Table 3: Asset management fees for a portfolio worth 1 million francs

Table 4: Investment advisory fees for a portfolio worth 500,000 francs