Fees can have a significant impact on the returns on investments, particularly in the case of retirement savings. That’s why selecting the right bank or online broker is crucial for cost savings. To maintain a comfortable standard of living in retirement, private provision is essential. Bank advisors often recommend investing pension capital in stocks to achieve attractive returns. However, many financial institutions impose high fees on customers, which can diminish investment returns.
The costs typically include brokerage fees, custody fees, account management fees, and administration fees for financial products. In some cases, bank customers are even required to pay for annual tax statements. Custody fees vary widely from one bank to another and can impact the overall investment return.
A study conducted by Moneyland.ch revealed that banks and online brokers charge different custody and account management fees in the Swiss market. For comparison purposes, fees were assessed for a passive portfolio consisting of Swiss stocks, American stocks, European stocks, and listed index funds.
The most cost-effective providers for custody fees were Cornèrtrader, FlowBank, and TradeDirect while Direct Net, UBS, and ZKB had the highest custody fees. Larger securities volumes result in higher custody fees as they are usually charged as a percentage of the total investment amount.
Experts suggest that a custody fee of 0.4 percent is no longer appropriate for the storage of exchange-traded and standardized securities. The degree of standardization in financial products can influence the justification for higher fees.
Customers should be aware of additional fees such as account management and securities account management fees as well as charges for digital tax statements.
Switching to online brokers or providers without custody fees is recommended to reduce costs and improve investment returns.
Neobanks like Yuh and Neon may offer more favorable fee structures for investors looking for a simplified investment experience.
In conclusion, understanding and minimizing costs is crucial for maximizing returns on investments.
