Swiss banking giant PostFinance is launching a new online trading product. The new e-trading platform was developed for PostFinance by Swissquote. Another novelty are the online trading fees imposed by PostFinance with effect from July 1, 2016 (or latest by January 2017 in the case of the new custody fees).
PostFinance now charges a minimum fee
Until now, PostFinance hasn’t charged share custody fees. But starting January 2017, PostFinance will levy a minimum administrative fee of 90 francs (including VAT) per year for custody account management. This fee will be deducted at the beginning of each year and this credit is used towards covering the cost of trading fees (brokerage fees on purchases and sales of shares).
If you already pay at least 90 francs in brokerage fees every year, you won’t really be paying any extra as your brokerage fees will simply be deducted from this administrative fee. But even if you don’t buy or sell any shares at all over a given year, you will still have to pay the 90 franc annual fee.
Discounts for frequent traders
Very large transactions now benefit from lower transaction fees. So if you buy or sell shares on the SIX stock exchange, for example, you will pay a maximum of 350 francs in fees (the previous maximum was 500 francs).
Another perk is that PostFinance now offers a bulk discount of 10% when you make 10 transactions or more annually, and 20% off when you make 20 or more transactions in a year. If you trade on the stock exchange regularly, these reduced costs will save you money.
“At the same time, by offering the bulk discount, PostFinance is encouraging investors to trade more frequently” according to Felix Oeschger, a financial analyst at moneyland.ch. “From a consumer perspective, that approach can be problematic. In many cases a more passive trading strategy makes more sense.”
Higher costs for infrequent traders
Conclusion: Many investors maintained trading accounts with PostFinance because it didn’t charge an administrative fee for share deposits. Now this benefit is disappearing. For passive account holders who do not trade regularly, the 90 Swiss franc minimum fee may can pose a big expense. If that describes your trading profile, you may want to look for a more affordable trading account at another bank.
Major differences in fees
The new trading fees from PostFinance are already integrated into the moneyland.ch interactive broker comparison tool. You can use this tool to compare deposit and trading fees for shares, securities, ETFs and structured products.
You can compare using specific criteria. According to Manz, “Comparing offers is a good idea because the differences in fees between banks are notable. For frequent traders, these differences can mean savings or losses worth thousands of francs per year”.