So today I was the only one who showed up at Spiga to meet the VIAC guys who came from Basel to meet someone from this community (I wonder why other 5 forum users filled the doodle but did not come in the end?).
We had a nice chat and I have to say I got a positive impression. Daniel and Jonas have been very informative and friendly.
What surprised me is that they claim to have already ~200 million CHFs invested even though they only started 3 weeks ago! When I asked them something like “why did you bother coming to Zurich to meet 5 people (actually, just one person!) when you are getting so many new customers already?”, they replied that they wanted to connect to this community of smart and financially educated people.
Personally, I’ll consider using them for my 3 pillar this year. I am only a bit unsure still as I am not the early-adopter kind of guy and they are really just starting (though the cash is held at WIR bank and the funds at CS).
Thanks for showing up yesterday! Eventough it was just you, it was an interesting lunch!
and it’s 2m CHF we manage allready, maybe 200m CHF in a few years just to clarify. But we grow fast and receive a lot of transfer advices lately.
And the assets are held by the Terzo Vorsorgestiftung der WIR Bank. Overall the foundation holds more than 850m CHF, thereoff 2m CHF are now invested with the new product VIAC.
@VIAC_Daniel & @VIAC I wish I could have joined you at Spiga but the Doodle was already full unfortunately. Next time maybe
What is the legal status of VIAC, is it a cooperative like the WIR Bank itself (or Mobility, Vanguard)?
Will all profits be re-invested to develop the products and/or lower the costs for the customers/members?
With a cooperative status it would make it even easier to convince friends to open an account as not everyone understands why a low TER helps on the long run for an investment like the Pillar 3a or why it can help to diversify beyond cash.
First, I would like to thank you for all those interesting questions!
Allow me to give you some details regarding our legal structure. The Accountholder has only a contract with the Terzo Vorsorgestiftung der WIR Bank. There is no other legal connection. The Terzo Vorsorgestiftung der WIR Bank then has two banking partners: WIR Bank for the Cash and Credit Suisse for all investments.
Furthermore, the WIR Bank operates VIAC, the product of the Terzo Vorsorgestiftung. That’s the relevant legal structure for the clients. VIAC Inc. is not relevant, we as a start up just came up with the idea and helped building the system and as know how partners. As it was our idea we wanted to call the product the same as our company – we thoughts that’s cool, but in the end it’s more confusing… If VIAC Inc. goes bust, it is not relevant for the clients – it’s holds no assets. The System would still be there, and nothing would have change for all our clients. We are just technologie provider and a think tank!
I hope this helps and keep in mind the bank who runs the system (WIR Bank) is a cooperative – customers before profits
Different withholding tax treatment of ETFs vs. Swiss Pension Funds should be also considered together with the TER.
For example:
US ETF: dividend yield 2%, withholding tax ETF 15% Ireland, 30% otherwise, while for Swiss pension fund 0% is achievable
Swiss ETF: dividend yield 2.5%, withholding tax 35%, while for Swiss pension fund 0%
Rest of the world: dividend yield 2.5%, withholding tax say 25%, while for Swiss pension fund probably 15% treaty rate
for a portfolio 40% Swiss, 30% US, 30% RoW the difference could reach easily 0.5-0.6%
(ETFs benchmarks include dividends after the full withholding tax at offshore rate)
I understand that some 3a funds (e.g. Swisscanto) replicate the indexes themselves and can take advantage of the double taxation agreements and also of special agreements for pension money.
In any case the tax difference for the Swiss part of the portfolio would be significant (35% withholding tax for ETF vs. 0% for pension money).
Sorry @balmung I’ve overlooked your post. Your are totally right about the withholding tax - it’s an important thing to look at when deciding which product to choose.
To clarify: 3a is not exempted from the withholding tax in the US. Our politicians f***ed that up with the the original DBA, as the US has some technical rules which apply and the 3a accounts where not covered with them. So the Swiss Government and the US planned to change that with an amendment protocol.
However, the amendment protocol was never ratified by the USA, as there was a tax dispute with Switzerland. Therefore, the status quo is still active.
In this matter, we have reached out to the ESTV and the SIF (State Secretariat for International Financial Matters) and wanted to put some pressure on them to finally make things work. Unfortunately without success - no one wants to put the head too far out of the window…
Sorry, I didn’t want to suggest that Swisscanto has a special agreement.
Concerning Swiss dividends, any Swiss Fund (with >80% Swiss investors) should be able to claim back the 35% withholding tax. 3a and BVG Funds should be in this category.
Concerning International dividends it depends country by country.
In the OECD model convention a “recognised pension fund” is considered a resident of the state where it is based, therefore it probably is able to get at least the 15% treaty rate (if not better). I would doubt pension money would be treated worse than an ETF.
I am not sure how the Double Taxation Agreements are applied in practice, there are complications.
Depending on geographical allocation there can be a bigger or smaller advantage in terms of withholding tax of a Swiss Fund (probably umbrella fund) vs ETF solutions. If you are highly skewed to CH equities for example.
From the Swiss point of view, my info are based on my not perfect understanding of the rather complicated book “Steuern kollektiver Kapitalanlagen - Die Besteuerung kollektiver Kapitalanlagen und deren Anleger” Hess, Toni
Thanks again for your feedback. We doublechecked the issue regarding the witholding tax once again. The conclusion was unfortunately still the same - as long as there is no change in the dba.
We will continue to monitor this and, in the event of a change, we will try to optimise it further.
Just wanted to add a short 3 month VIAC user comment to this thread.
Transferred money over from an existing account in December 17, working my way up stepwise to Schweiz-100 starting from the 100% cash position on 31.12.17. Not all-in from the start due to high current market valuations & volatility. Sticking to the Schweiz product rather than Global at the moment as I’m more optimistic / less pessimistic about the Swiss market compared to Global at the moment.
To the product, all works well with the App and the re-balancings. Good clear documentation available on all transactions.
On a related but other note, I’ve just seen that Postfinance has sneakily (i.e. without actively informing) upped the TER on my other Postfinance Pension 75 product from 0.94 to 1.0%.
Browser access is coming in spring they said. I will move ALL my 3a to viac as soon as I can have multiple accounts.
I was also thinking about doing my individual portfolio (also in spring I think) and buy the ETFs at VIAC which yield the hightest dividends in order to save taxes. Did someone else have similar thoughts?
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just to clarify. But we grow fast and receive a lot of transfer advices lately.
