Why are there no ETF Sparplans (ETF savings plans) in Switzerland?

For those who don’t know what ETF Sparplan is, it is a “savings plan” offered by a broker or a bank where you pay them a small fee (couple of euros per month or even FREE) so they invest AUTOMATICALLY every month a predetermined sum of your money into the ETF of YOUR choice. So it’s a great DIY solution for passive investors with extremely low costs, sometimes even zero costs (except the TER). It’s a very popular set-and-forget dollar-cost averaging wealth accumulating strategy amongst passive investors (Bogleheads for example).

JustETF is full of offers for ETF Sparplans in Germany. I know that there are plenty ETF savings plans in USA, Italy and other countries. However in Switzerland I wasn’t able to find such offer. I’ve contacted many Swiss brokers and banks and they just don’t offer it. Swissquote used to offer such a savings plan years ago but does not anymore. I wouldn’t mind paying higher transaction fees, just do it for me automatically every month like a standing order so I never have to do it manually and think about it.

Now you might ask what is the problem with investing MANUALLY into one ETF once a month? Well it takes away your precious time month after month, year after year investing in the same ETF. Why can’t I pay a broker or a bank to do it for me? The problem is also the fact that it’s not automatic therefore subject to people’s mood. The decision whether to invest each and every month is left to your weak mind. Before you tell me that we shouldn’t be weak, let me tell you that most people are not like you guys on this forum. I know plenty of friends and family who would benefit from such an automatic savings plan. Their investing mood changes from month to month depending on their financial conditions or some other expense that needs to be covered or you must have that new Iphone this month or big 4K TV, whatever. Not everybody is disciplined like a soldier to dollar-cost average no matter what. People are not robots and are emotional beings hence they often skip these monthly investments. This is detrimental to their returns and wealth accumulation over long run.

There are automatic options in Switzerland but they are ALL robo advisors. What’s wrong with them is that they’re geared toward inexperienced investors so THEY choose the investment strategy for you. You can’t choose the ETFs by yourself for example. You also can’t choose 100 % world equity strategy, there’s always some bonds, swiss stocks, gold… in the mix to “protect” you. And worst of all they charge you management fees for their advice so the total cost is much higher than your German ETF Sparplan.

I have 2000 chf each month that I want to invest automatically into one single MSCI World ACWI or FTSE All-World ETF. What are my options? Can Swiss residents invest with one of these numerous German brokers and banks that you can find on JustETF? I assume we can but what about cost of converting chf to eur each month? And what about the German taxes and double taxation issue?

I hope somebody sympathizes with me and offers some insight.

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Yeah you’re right, 5 minutes per month is too much

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And here come the new challenger: Investart - Investing made simple

This is exactly what you were waiting for and I think that it is a great new challenger in Switzerland. They use Interactive Broker to invest your money and you can chose your ETFs and strategy. They will just invest for you automaticaly. You just need to login sometimes when they notify you that your current strategy is not following your asset allocation (rebalance). They need you to confirme if you want to rebalance your asset allocation.

However, they use a lot og hedged ETF and they are already selected some ETFs for you. I asked them if it will be possible to choose your ETF, for exemple: VWRL and they answered that for the moment it is not possible, sadly.

I’m not with them, but they are interesting if they allowed you in the future to invest in your favorite ETF instead of the one they selected for you.

C’mon, that’s not fair, he gave very valid further reasons why the concept is not only about saving 5 minutes a month.

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You can. Even at UBS.

I think they just want to sell you more expensive products: active and/or mixed funds with less transparent cost. Or “advisory”.

In addition, I could think of a few other (though less important reasons)

  • average savings amount in Germany are probably much lower
  • handling of fractional ETF shares is a bit of a mess
  • the Germans often collect it with direct debits - whichare much less popular in Switzerland and more cumbersome to set up

German ETF savings plans are marketed as low-cost and largely advisory-free investment products - both of which is totally un-Swiss and probably frowned upon sophisticated Swiss bankers :wink:

Sure - at least as long as you can handle German.
I’ve had accounts with 4 German brokers last year.

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Some 3a providers like VIAC and Finpension act basically just like ETF sparplans. The issue is that the yearly investment is limited but for a lot of non-mustachian people it’s probably more than enough.

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True, for most people 6800 chf per year will be enough. And I will certainly recommend this solution for my less fortunate friends and family who don’t have 2000 chf per month to invest.

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My bank is actually UBS and I asked my personal advisor about the sparplan when I moved here last year and he said they don’t offer such a service. But don’t worry, I’m sure some senior advisor would say yes but would charge me enormous fees for the service :slight_smile:

So I can just pick a German broker/bank tomorrow on JustETF and set up a standing order for 2000 chf from my UBS bank to my German brokerage account?

They probably got confused, the fund account works as you describe a spar plan (you setup a portfolio, and it automatically invests in your preprogrammed funds whenever you transfer money).

Seems like you can only use ubs funds this way (but technically they don’t all have horrible TERs, tho you’ll definitely be better off with DIY ETFs).

edit: ok no, they all seem to have horrible TERs :slight_smile:

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There are index funds with 0.18-0.30% TER that are UBS fund account compatible.

0.20% yearly fee and 1-2% commission is still a dealbreaker though.

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Sorry, should have made it clearer above, but as nabalzbhf said: Their investment fund account works just like that. I’ve had it myself until recently. It’s just that they don’t “sell” you any low-cost ETFs. (Though they had a Swiss passively managed fund, I think, that wasn’t too bad).

Sure, if the securities account comes with a cash account that you’ll transfer too*. Keep in mind that the exchange fluctuates and the Germans obviously are only doing business in EUR (the banks will convert to EUR, just forget about CHF accounts).

* Consors, comdirect, Smartbroker do. For DKB, the brokerage is tied to their payment account - which they have been somewhat reluctant to open for non-residents (unless you’re German). Though I can otherwise highly recommend the account and its VISA card, especially if you’ll be transferring 700 EUR or more into it each month.

DKB also have a very large and interesting selection of ETFs, IMO, and are often the least expensive on paper (save for time-limited promotional ETF savings plan offers).

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I wonder if it’s because they simply implement it by clicking the rebalance button once a month :slight_smile: Rebalance Portfolio | Interactive Brokers LLC

(if you only have a few portfolio you support if you group the account properly, that might just take a few minutes with the UI no need for scripting :smiley:

edit: Model Portfolios | Interactive Brokers LLC is probably what they use, and indeed sounds like it wouldn’t work if you have to many models.

None.

Unless given very specific circumstances (basically: owning a business or real estate in Germany, being subject to special exit tax rules as a German having to moved to CH as a tax haven.

The ETFs you’re investing in will with very few exceptions be domiciled in IE/LU anyway.
(And before anyone asks: No, you aren’t going to get U.S. ETFs as a personal retail investor).

Roughly 1% at a Swiss bank, before / whenmaking a EUR SEPA transfer* directly from your account.
Roughly 0.5% (0.45% through Wise, formerly TransferWise), which will arrive as a domestic transfer.

* beware, some German banks seem to have recently (after Brexit) gotten hold of the possibility to charge more for non-EEA SEPA transfers (i.e. from the U.K. or Switzerland to Germany and vice versa) than they do within the EU/EEA.

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Sorry if this is a stupid question but don’t I have to add this currency converting cost to the total cost of my investment? If so, didn’t my low cost German ETF Sparplan suddenly become very expensive?

Keep in mind that currency conversion will happen just once. For a long time, at least, if I am correct to assume you intend a long-term investment.

With more expensive Swiss offerings, there will (often) be recurring costs.
The German brokers usually don’t charge any upkeep cost, no stamp tax, etc.

Also to consider are trading costs. ETFs in saving plans can usually be had for a low flat fee.
The question is: What are you comparing to?

Take for example, for a 2000 CHF ETF trade at SIX or local German exchange:

  • Swissquote, 9 CHF flat per trade, 60 CHF yearly custody fee (minimum).
  • PostFinance: 25 CHF per trade, 90 CHF custody fee (minimum), with trading credits
  • TradeDirect: 17.90 CHF per Trade, 40 CHF yearly custody fee (minimum)
  • Smartbroker: 4 CHF per savings plan purchase, no custody fee
  • DKB: 1.66 CHF per savings plan purchase, no custody fee

PS: If I’m not mistaken, in CH there should be 0.15% stamp tax, an additional CHF 3 per transaction

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Another stupid question… What do you mean once? I will be transferring chf to Germany every month for years…

Yes, but on every transfer you do, it will be charged only once.

Under recurring costs, we understand TER or Depot upkeep costs, which will be charged every year on the same money.

So : transfer costs or buying costs are charged only once on the 2000 CHF you transfer. So basically you are buying a bit above the markt price. Since you expect a rise of 100% every 7-10y, this is mostly negligible if kept low enough (benchmark IB would be less than 0.1% all things considered, everything below 0.5% would be considered fine).

TER and depot upheld cost will be charged every year, effectively reducing your returns every year and having a huge impact on the snowball effect => much more important to keep low.

Found this nice graph, where the difference of buying costs is visible (1.5% instead of none)

The game changer for you is that you save 2000 CHF/month, not if you pay 1.5 or less than 0.1% costs per transaction.

Leserin L.: Sparplankosten zu hoch? | Finanzwesir

Did I already say that I love that finanzwesir guy ?

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Yes, their MSCI World ETF is hedged and TER is 0,55 % which is high. Do you guys think it’s necessary to use hedging? Or would it be better to use the non-hedged solution elsewhere with 0,20 % TER if I’m not worried about currency fluctuations in the long run?

Hedging for equity is usually considered to be costly and not very useful: https://personal.vanguard.com/pdf/ISGPCH.pdf (for equity it doesn’t reduce much volatility and long term hedged and unhedged have the same performance - minus cost)

These exist:

  • Truewealth
    *Yova
    *Selmafinance
    *Most bank (UBS, Cler, CS, ect) offers their funds
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