Wealth Management: Questions and Answers

How should I invest my money?

How can I optimize my tax setup? Who will inherit my wealth? Wealth management can provide the needed help in organizing and managing your financial life. This guide gives you a basic understanding of wealth management services.

What is wealth management?

The term wealth management refers to a service that, in turn, includes many different services related to asset management and financial planning. The exact services included vary between offers, but commonly include the following:

• Asset management
• Tax consultation and legal advice
• Retirement and estate planning
• Loans and financing
• Philanthropic consultation (establishing foundations, for example)
• The creation of companies and associations
• Real estate services
• Insurance

The goal is to organise your overall wealth and financial life for you. In the case of family offices, the services provided can extend to other areas of your life as well. By giving a bank a wealth management mandate, you normally entrust all of your assets to that bank. Some services, such as tax consultation, may be offered in cooperation with external partners.

How is wealth management different from asset management?

The terms wealth management and asset management are often used synonymously. But they are not the same thing. Asset management services primarily manage an investment portfolio on your behalf with the goal of achieving a return that matches your risk profile.

Wealth management, on the other hand, provides comprehensive financial planning and management. It includes many different services, with asset management being just one component.

Who can benefit from using a wealth management service?

Unlike most asset management services, wealth management services are designed specifically for high-net-worth individuals and families. This is often reflected in the high minimum asset requirements. Depending on the service provider, you may have to have assets in the seven-figure range just to create a mandate. The minimum portfolio value to create an asset management mandate, on the other hand, is often 50,000 francs. Online-only asset management services (robo advisors) often let you open a mandate with less than 10,000 francs.

Which banks offer wealth management?

Wealth management is a key component in the core offerings of many Swiss private banks. Examples include Julius Bär, Lombard Odier, Pictet, and Vontobel. There are also universal banks – including UBS and some cantonal banks – that have wealth management in their product lineups. Be aware that many Swiss banks use the term private banking as a blanket covering various services, without a clear distinction being made between wealth management and asset management.

What are the costs of wealth management?

The cost structure is usually similar to that of asset management. You pay a flat fee which – depending on the service provider – may include brokerage fees and custody fees. The fees charged by the companies that operate the funds and other third-party products used come on top. Because wealth management includes a much broader scope of services, the fees are often higher than those charged for just asset management. 

Fees for services from external partners, such as third-party tax advisors and legal consultants, may be charged on top.  

When does using a wealth management service make sense?

Wealth management is primarily useful for very wealthy individuals and families. If you have a large amount of wealth and need help planning your financial life and managing your assets, wealth management can be worth considering. In this case, it is beneficial to get multiple quotes from different service providers and compare the offers.

For people without a high net worth, wealth management services are neither advisable nor accessible. Many of the services included in wealth management only make sense for large amounts of wealth. If you do not want to invest on your own, you could consider using an asset management service. Online asset management services, for example, often have low initial capital requirements and affordable fees – less than 0.5 percent in some cases. You can compare offers using the interactive asset management comparison on moneyland.ch.

More on this topic:
Compare Swiss asset management offers now
Swiss robo advisors compared
The costs of asset management explained