Broker choice when working for big Swiss bank

Investing / Brokers
1

Hi All,

I’ve seen this topic lightly touched in other threads, however would like to kick of new one.
I work as an perm employee for one of big Swiss banks on IT (no insider information) side, which means that I am limited of broker choice - have to do investing with banks brokerage solution (high fees even with 50% employee discount).
My fiancee and future wife is using IB. Good news is that until I do not have power of attorney of my wife’s account, it does not need to be disclosed to my employer/bank and eventually forced to use it’s brokerage.
However, I’ve seen IB is asking if any or close family is working in bank. Does anyone now what does IB do when disclosed that (eg. husband) works in bank? Do they ask for some approval from employer, limit functionality or anything else?
Finally, since you are married all gained assets/pensions are split 50/50 in case of divorce. Is there anything against transferring all assets to wife’s account and keep investing through IB? One I can think off, if wife decease and not having power of attorney to her account might be difficult to get access to the assets. But I guess testament would mitigate this risk?

Anyone else having similar situation and willing to share their solution how to manage familys saving/investment efficiently and legally while working for big bank with all limitations it brings?

Thanks

2

I don’t know anything about it, but it would seem weird that you guys share the wealth after getting married, but somehow her trading account is not relevant to your employer?

Also, aren’t the possessions that you had before getting married excluded from the joint wealth? In any case, I would try to at least do it like this: all we had until our marriage is not shared, all we earn from the beginning of the marriage IS shared.

But back to the original question: since your bank requires you to have your brokerage with them, maybe treat it as a part of what you’re getting paid for by them. Yes, you pay more, but that’s just a bundled package with the job. Maybe you discuss it with your boss or other colleagues, maybe it’s possible to get an even better internal deal?

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3

I am in the same situation. As far as I understood it, what is important is the owner of the brokerage account. So if only your wife is owner on the account you should be fine. However that also means that in case of any “problems” with your wife, she could claim the same thing. It’s her money and not shared with you.

At the end, I would never risk my job for saving couple of hundreds CHF per year: if it’s really your wife money and easy to prove it (pre-marriage, inheritance etc…) go ahead, otherwise as Bojack said consider it part of the “package” of your job.

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4

Out of curiosity, what is the banks official reason for having you to use their brokerage system?

5

Compliance. (can’t imagine anything else)

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6

Worldwide banks policy would require to disclose and “bring” such account into banks. My guess some Swiss secrecy or other law kick in and spousal accounts without power of attorney do not need to be disclosed.

That’s true about assets before marriage. But I speak post marriage earned assets, which kinda are no longer mine or yours, it’s ours. So wouldn’t these assets be able to migrate easily from mine to her accounts without any repercussion?

7

Well, I do not intend to do anything illegal or risk my job, but was interested if anyone has experience or even legal advice how law interprets such situation.

8

As mentioned above it’s mainly compliance, to prevent employees in engaging illegal activities like insider trading, front running and etc.

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9

Hi I am in the same situation. Changed my Job recently, working now in IT for one of the big bank . Fees are ridiculous even with the employee discount. We are supposed to transfer all the assets etc to the bank 3 months after joining the bank (basically end of trial period). I have found that the exception is possible however. I found form somewhere in the HR Net in policy for employees which you have to fill and ask for exception. It has to be approved by HR and Executive board member corresponding to your part of organization (in case of IT I guess COO) + you have to report everything every 3 months to compliance.

10

Good luck with that and let me know if you will have any success. But as far as in my bank, exception is granted in very specific cases, eg. particular asset cannot be traded on bank’s brokerage. Otherwise forget and comply.

11

Out of curiosity, do you know any other examples of employees being forced to use the services of their employer? Volkswagen employees needing to drive a VW? Coop employees having to shop at Coop? :stuck_out_tongue:

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12

Except maybe for board members, I don’t really understand these restrictions. In insurances, employees are not force to suscribed to the product of their company, same for other industries like @Bojack mentionned.
Moreover, this obligation doesn’t make any sense as consultants don’t need to comply.
A part from the higher fees, I don’t like the idea that my employer could potentially have acess to all my financial data.

Only few employees would have access to insider data.
Does bank employees have really more info than in another company? An Apple employee (or any companies) could do front running based on the launch of new products…

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13

I’m pretty sure Volkswagen, Coop or insurance companies finance departments employees and board members are not allowed to trade their own company stocks certain period around earning announcement. How this is implemented, if anyhow, don’t know.
Now banks are different thing as quite a lot of people have access to sensitive information, eg. fin department, mergers & acquisitions, equity financing, trading and executions, etc. To control tens of thousand employees is not easy and it takes only one person to inflict damage to banks reputation.
Consultants/contractors usually do not have access to sensitive productions data.
I’m in IT am marked as “non sensitive”, meaning do not have any insider information, but still need to go through their internal brokerage. “Sensitive” employee spouses need to declare and “bring in” account into bank. And I agree with this approach, no complains no trying to game the system.
So will repeat my questions:

  1. any legal/tax impact transferring all my assets to wife’s account?
  2. what does IB do when one of family members is bank’s employee?
14

I work in a bank which does not have a brokerage account. In my case, IB asked me to contact the compliance department of my bank so that they write directly to IB that they approve the opening of my account. I expected the process to be quite laborious but it went surprisingly fast. As soon as IB received an approval email from the compliance department, they went ahead with the account creation.

15

@Bojack, just a rumour: Back in the 80s-90s I heard that employees at Pepsi Co were fired if they were caught in the act of drinking… a Coca-Cola soda. Or was it a hoax?

I’m being naïve I guess. As somebody not working in finance at all, I was surprised that you (and your spouses) need to bring in all your brokerage under the same roof as your employer, even when you’re not labelled as sensitive.

16

I can imagine this applies to top executives. They should not be caught in public using the product of the competition. Funny story: a while ago Gal Gadot was advertising Huawei or sth on her Twitter (for sure pays someone to post for her) and MKBHD pointed out that all of her tweets are marked “sent from an iPhone”.

Edit: here it is:

image
image1125×1550 164 KB

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17

Hi All,

Bringing back old thread as my martial status has changed.
I work in bank and manage investments there due to compliance requirements. Now, my wife has IB account for her personal investment. Now uncertainty is two fold:
a. Since I’m not “sensitive” employee my employer does not require to disclose and transfer spouse investments into the bank.
b. IB has regulatory check if account holder spouse is employee of the bank.

So theoretically all could remain the same. However, does anybody know what does IB regulatory check changes once you disclose that spouse is employee of bank? I understand they report this to FINRA which is US institution, but does this affect Swiss residents?

Thanks

18

Were you sucessful in filing an exception ? If yes, what was your explaination ?

19

I have observed individuals receiving exceptions, usually for valid reasons. For instance, a portfolio held in a Finnish bank may necessitate the inclusion of Finnish stocks. Once this exception is granted, users can then apply it to any other stock or fund.

Exceptions have also been granted for robo-advisors such as TrueWealth or Selma.

On the other hand, I haven’t come across any exceptions being granted for IB or Degiro. I am also keen to learn more about others’ experiences on this matter.

Edit: On the other hand having your Portfolio in the big Swiss bank may allow you to get a good rate Lombard loan.

20

I doubt that you get better conditions than IB.