Got it.
Yeah VTI is good. In most case all WHT can be recovered if amount is more than 100 CHF (across all the DA-1 assets)
You would probably not sell there, I guess. Either OP would change employer and move the ETF to IBKR or his new bank or OP would get retired and move the ETF to IBKR.
Fund account allows only for UBS funds (mainly actively managed ones, but there are a couple of index funds) and allows for standing orders. So it’s very convenient for investing regularly. The custody account is just a normal custody account. You can buy stocks, you can buy ETFs etc. → but with higher costs.
I think the tax disadvantage of the fund account with the index fund I linked is overweight by its lower cost to buy it and its convenience. Yearly costs are roughly the same. VTI has lower TER but 0.175% custody fee, the index fund has a higher TER but no custody fee.
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Is UBS the only employer in Switzerland with such strict regulations? Or it’s the same for Julius Baer, Vontobel, etc.? Do you have any information on this?
Yes similar regulations for others (former private bank employee). Its just compliance and unfortunately it is what it is.
A friend works at Raiffeisen, he has the same restrictions. I believe he isn’t even allowed to trade single stocks, just funds.
I have several friends working for different banks. Everywhere the same story. Swiss banks are just very strict about the whole trading thing.
This restriction makes total sense though. Employees working in banks have access to sensitive info and their trades need to be auditable
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Well IBKR offers automated reports for banks, specifally for those that work for banks. But most banks don‘t want to get through that trouble.
Of course
First banks hire an employee and then the employees use other brokerages to invest their personal money. And then bank need to have automatic reports from other brokerages.
If I am UBS or ZKB, I would never do that. This is like promoting competition services.
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I see. I mean I get compliance, but I did work at a US bank before (not in Switzerland), which was on the same level as UBS, and they only required us to submit our buy/sell positions, and wait for approval + hold for at least 6 months. We could keep our separate brokerage accounts. I think it makes more sense that way.
@Abs_max reply to your response as well.
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Let’s just say this is an area where Compliance obligations and commercial motivations overlap.
Just one info
It seems this rule is for Swiss banks only
For European banks operating in CH , they are okay with disclosures
If you were to leave the bank @Cortana, wouldn’t there be very high costs of transfer and custody at another broker for your FUND ACCOUNT funds, even the passive ones? I guess that these costs would need to be factored in as well, especially considering the long term focus of these index fund strategies
Depends on the new and current employer. Some banks pay for the transfer fees when the employee joins. Others offer it for free when you leave.
So unless the current one pays on the way in only and the new one on the way out only, this should be free.
I think it’s CHF 100 per position. If you just have 2-3 indexfunds/ETFs, I guess it would be fine.
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I’m a bit confused about the fee structure.
The fund factsheet mentions a management fee and ongoing costs (TER).
Additionally, the investment fund account mentions an administration fee.
For employees, are both the administration and management fees waived, leaving only the 0.22% TER?
There are two kind of ongoing costs
TER + Custody fees
- TER includes Management fees. I think they are just mentioning management fees separately to be transparent. So you should expect 0.22% in terms of cost of holding the fund.
- Custody fees charged by your brokerage / bank. I believe this admin fees from UBS is about that. I think employees get discount but I don’t think it’s zero
By the way, if you are forced to buy UBS products, maybe also compare & consider the UBS(IE)S&P 500 ETF. Since it’s based in Ireland, it might be lower effective cost for you due to lower withholding taxes on dividends.
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TER is 0.22%, correct. Administration fee is 0% with fund accounts if you have a standing order. Custody account fee (normal custody account for stocks, ETFs etc.) is 0.175% yearly.
This is Switzerland, and they take privacy very seriously. If you trust your partner with your money then they can sign up individually with any brokerage and trade. I have asked this to compliance and it’s allowed. You need to disclose the account with your employer but the account is in your partner’s sole name and so they can do whatever they want. Just pray your partner doesn’t run off with the money.
The fees that these banks charge is just ridiculous, even with their highly touted 50-70% staff discount.
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