ZWEI Wealth Blog

Cost comparison: Where is the fair fee level?

Written by ZWEI Wealth | May 29, 2024 5:04:15 PM

It is difficult to keep track of all the different fees. The latest fee comparisons show that most asset management solutions today have a very high savings potential. The analysis below help with the comparison and show the need for action.

 

 

Cost comparison by asset size

Chart: Fee comparison for asset management solutions with different investment volumes. The fees shown are expressed as a percentage of assets under management and are total costs (TER), which includes all fee categories listed below.

 

The savings potential is huge

Good asset management is not more expensive - on the contrary. The table below shows the annual costs as a percentage of the investment volume and the savings potential for various portfolio sizes.

Portfolio size
1 million
5 million
30 million
100 million
Top offers
0.45%
0.38%
0.22%
0.08%
Good offers
0.72%
0.62%
0.45%
0.35%
Market average
2.26%
1.95%
1.67%
1.22%
Average savings potential (CHF)
18'100
per year
78'500
per year
435'000
per year
1'140'000
per year

 

Attention - there are many hidden costs

It is important to know what costs are incurred in relation to the management of your assets. Banks and asset managers do not have an actual statement of costs. Although customers receive individual statements over the course of the year, a comprehensive overview is not provided. In addition, there are a large number of fees for which there is no statement but which are charged differently (e.g. product fees, FX fees). ZWEI Wealth has been establishing a new standard for clients with a Wealth Office for years. Here is a list of the various types of costs and a description of them:

 

Tips & tricks on costs

  1. Billing errors are very common
    The banking systems for costs are very error-prone and are overridden centrally when changes are made, which means that individual agreements often go unnoticed.
  2. Indirect costs are not displayed
    Indirect costs are missing from the cost statements. On average, these account for the same amount as the direct costs. These costs must be disclosed by the bank or asset manager on request.
  3. Prices are negotiable
    The list prices of banks and asset managers are deliberately set high in order to maximize prices for less price-sensitive clients. If you don't negotiate, you pay too much.

 
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