[artlgnc_builder_page_section id=’rpsTE9MXNP9UY0OPW46RM3OIU406NW1C7UU’ first=’true’ last=’true’ section_name=’Section’ zindex=” layout=’default’ row_gutter=’default’ section_dom_id=” classes=” layers=” background_opts=” background_color=” background_opacity=’100′ background_image=” background_image_thumb=” background_position=” background_cover=” background_repeat=” background_attachment=” background_gradient_dir=” start_gr=” end_gr=” margintop=” marginright=” marginbottom=” marginleft=” ][artlgnc_builder_page_container id=’rpcWW682O9MEC11VVIDUKD1JFSQJS1FSNU6′ layout=’full’ first=’true’ last=’true’ top=’true’ use_animation=’false’ animation=’none’ animation_duration=’0.5′ animation_delay=’200′ classes=” section_dom_id=” float=’left’ visibility=” background_opts=” background_color=” background_opacity=’100′ background_image=” background_image_thumb=” background_position=” background_cover=” background_repeat=” background_attachment=” background_gradient_dir=” start_gr=” end_gr=” margintop=” marginright=” marginbottom=” marginleft=” ][artlgnc_builder_page_widget id=’rpwNQOWYGWMRFFTMUKF8XALL3RDC3VYU8C3′ type=’artlgnc_builder_text_widget’ last=’true’ top=’true’ type=’artlgnc_builder_text_widget’ col_style=’none’ ov_title=’yes’ text_title=” text_title_heading_tag=’h2′ text_subtitle=” text_subtitle_heading_tag=’h3′ rich_key=’text_data’ col_link=’none’ custom_link=” video_link=” image_link=” button_label=’More’ icon=” icon_hidden=” col_align=’left’ use_animation=” animation=’none’ animation_duration=’0.5′ animation_delay=’200′ animation_selector=’parent’ title_font_color=” title_font_font_size=” title_font_font_weight=” subtitle_font_color=” subtitle_font_font_size=” subtitle_font_font_weight=” text_font_color=” text_font_font_size=” text_font_font_weight=” button_text_color=” button_text_color_on_hover=” rich_key=’text_data’ ]%3Cp%3EThere%20is%20currently%20a%20trend%20towards%20greater%20cost%20awareness%20in%20Swiss%20private%20banking.%20Robo-advisors%20are%20challenging%20traditional%20providers%20with%20more%20favorable%20prices.%20As%20an%20independent%20private%20banking%20specialist%2C%20FinGuide%20has%20data%20on%20both%20prices%20and%20the%20returns%20achieved.%20In%20this%20article%2C%20we%20want%20to%20address%20the%20question%20of%20which%20of%20these%20two%20factors%20is%20more%20favorable%20for%20investors.%3C%2Fp%3E%0A%3Cp%3E%C2%A0%3C%2Fp%3E%0A%3Ch2%3EThe%20Needs%20of%20a%20Typical%20Client%3C%2Fh2%3E%0A%3Cp%3ELet%20us%20examine%20a%20typical%20client%20here%20at%20FinGuide%3A%20the%20client%20has%20assets%20of%20three%20million%20francs%20and%20would%20like%20to%20invest%20her%20funds%20in%20a%20balanced%20mandate.%20Let&squot;s%20roughly%20define%20this%20as%20an%20investment%20with%20a%20maximum%20equity%20component%20of%2060%25.%20As%20the%20client%20does%20not%20have%20a%20particularly%20generously%20endowed%20pension%20fund%2C%20the%20investment%20performance%20will%20have%20a%20significant%20influence%20on%20her%20lifestyle%20after%20retirement.%20The%20capital%20stock%20should%20be%20preserved%20for%20her%20children%20if%20possible.%20She%20is%20now%20faced%20with%20the%20question%20of%20whether%20she%20should%20pay%20more%20attention%20to%20low%20costs%20or%20(historic)%20returns%20when%20choosing%20a%20provider.%3C%2Fp%3E%0A%3Cp%3E%C2%A0%3C%2Fp%3E%0A%3Ch2%3ECosts%3C%2Fh2%3E%0A%3Cp%3EFocusing%20on%20costs%20has%20an%20unbeatable%20advantage%3A%20costs%20are%20always%20foreseeable%20for%20the%20future.%20Favorable%20providers%20generally%20remain%20favorable%20in%20the%20long%20term.%20And%20if%20an%20unpleasant%20price%20increase%20is%20imminent%2C%20a%20competitor%20with%20favorable%20prices%20can%20be%20found%20quickly.%20What%20does%20favorable%20mean%20in%20specific%20terms%3F%20The%20most%20favorable%20providers%20are%20the%20so-called%20robo-advisors.%20The%20total%20costs%20of%20a%20robo-advisor%20consist%20of%20two%20components%3A%20Management%20fee%20(ideally%20including%20custody%20account%20fee%20and%20transaction%20costs)%20and%20product%20costs%20(fund%2FETF).%20Robo-advisors%20are%20favorable%20in%20terms%20of%20both%20components%3A%20the%20management%20fees%20for%20low-cost%20robo-advisors%20are%20around%200.5%25-0.6%25.%20Mostly%20ETFs%20with%20low%20costs%20are%20used.%20If%20we%20assume%200.2%25%20for%20ETF%20fees%2C%20this%20results%20in%20total%20costs%20of%200.7-0.8%25.%20This%20means%20that%20our%20sample%20client%20saves%20around%20half%20a%20per%20cent%20per%20year%20in%20costs%20compared%20to%20an%20active%20wealth%20manager.%3C%2Fp%3E%0A%3Cp%3E%C2%A0%3C%2Fp%3E%0A%3Ch2%3EObjectives%20of%20the%20Providers%3C%2Fh2%3E%0A%3Cp%3EThe%20low-cost%20wealth%20managers%20generally%20pursue%20a%20passive%20investment%20approach.%20In%20other%20words%2C%20they%20do%20not%20try%20to%20beat%20their%20reference%20portfolios%2C%20but%20to%20lose%20as%20little%20as%20possible%20against%20these%20defined%20benchmarks%20thanks%20to%20low%20costs.%20Active%20wealth%20managers%2C%20on%20the%20other%20hand%2C%20aim%20to%20outperform%20a%20defined%20benchmark%20or%20generate%20a%20certain%20excess%20return%20compared%20to%20a%20risk-free%20interest%20rate.%20Do%20they%20succeed%3F%3C%2Fp%3E%0A%3Cp%3E%C2%A0%3C%2Fp%3E%0A%3Ch2%3EReturns%3C%2Fh2%3E%0A%3Cp%3EThis%20is%20where%20you%20will%20see%20big%20differences.%20Many%20banks%20and%20wealth%20managers%20fail%20to%20regularly%20outperform%20their%20benchmarks.%20So%20if%20you%20are%20a%20client%20of%20one%20of%20these%20providers%2C%20you%20would%20be%20better%20off%20with%20a%20robo-advisor.%20When%20selecting%20the%20banks%20and%20independent%20wealth%20managers%20we%20work%20with%2C%20FinGuide%20places%20a%20strong%20focus%20on%20the%20returns%20generated%20for%20clients.%20It%20turns%20out%20that%20there%20are%20private%20banks%20and%20independent%20wealth%20managers%20that%20exceed%20the%20reference%20figures%20more%20often%20than%20they%20miss%20them.%3C%2Fp%3E%0A%3Cp%3EHere%20is%20an%20example%20over%205%20years%20with%20real%20figures%20for%20our%20model%20client%20who%20invested%20three%20million%20in%20a%20balanced%20strategy.%20We%20use%20the%20average%20of%20balanced%20wealth%20management%20funds%20from%20UBS%2C%20Credit%20Suisse%20and%20Swisscanto%20as%20a%20benchmark.%20This%20is%20because%20there%20is%20no%20%22single%20correct%22%20benchmark%20consisting%20of%20indices%20for%20a%20balanced%20strategy%20in%20Swiss%20francs%20and%20we%20don&squot;t%20want%20to%20get%20lost%20in%20a%20discussion%20about%20it%20here.%3C%2Fp%3E[/artlgnc_builder_page_widget][/artlgnc_builder_page_container][artlgnc_builder_page_container id=’rpcHHP9KN9A0IHMYQFJX0XR1JR17QJKFES2′ layout=’full’ first=’true’ last=’true’ use_animation=’false’ animation=’none’ animation_duration=’0.5′ animation_delay=’200′ classes=” section_dom_id=” float=’left’ visibility=” background_opts=” background_color=” background_opacity=’100′ background_image=” background_image_thumb=” background_position=” background_cover=” background_repeat=” background_attachment=” background_gradient_dir=” start_gr=” end_gr=” margintop=” marginright=” marginbottom=” marginleft=” ][artlgnc_builder_page_widget id=’rpwF9QCY7GCMLU33OX64O74OB3E5QCHDIN7′ type=’artlgnc_builder_table_widget’ top=’true’ type=’artlgnc_builder_table_widget’ design=’default’ rich_key=’table_data’ use_animation=” animation=’none’ animation_duration=’0.5′ animation_delay=’200′ table_heading_background_color=” table_text_color=” table_heading_color=” table_heading_border_color=” rich_key=’table_data’ ]%7B%220%22%3A%7B%221%22%3A%22%22%2C%222%22%3A%22Net%20return%20year%201%20in%20%25%22%2C%223%22%3A%22Net%20return%20year%202%20in%20%25%22%2C%224%22%3A%22Net%20return%20year%203%20in%20%25%22%2C%225%22%3A%22Net%20return%20year%204%20in%20%25%22%2C%226%22%3A%22Net%20return%20year%205%20in%20%25%22%2C%227%22%3A%22Net%20return%20total%20in%20%25%22%2C%228%22%3A%22Capital%20after%205%20years%20in%20CHF%22%7D%2C%221%22%3A%7B%221%22%3A%22Provider%20A%22%2C%222%22%3A%227.5%22%2C%223%22%3A%222.0%22%2C%224%22%3A%22-2.6%22%2C%225%22%3A%22-3.6%22%2C%226%22%3A%228.6%22%2C%227%22%3A%2211.8%22%2C%228%22%3A%223&squot;354&squot;252%22%7D%2C%222%22%3A%7B%221%22%3A%22Provider%20B%22%2C%222%22%3A%229.5%22%2C%223%22%3A%223.8%22%2C%224%22%3A%222.7%22%2C%225%22%3A%223.6%22%2C%226%22%3A%2213.5%22%2C%227%22%3A%2237.3%22%2C%228%22%3A%224&squot;117&squot;739%22%7D%2C%223%22%3A%7B%221%22%3A%22Benchmark%22%2C%222%22%3A%226.0%22%2C%223%22%3A%227.3%22%2C%224%22%3A%22-2.4%22%2C%225%22%3A%221.7%22%2C%226%22%3A%228.6%22%2C%227%22%3A%2222.6%22%2C%228%22%3A%223&squot;678&squot;133%22%7D%7D[/artlgnc_builder_page_widget][artlgnc_builder_page_widget id=’rpwV3XWQ1QW3V4EJUU79GPVB9DNEYJE0XOA’ type=’artlgnc_builder_text_widget’ last=’true’ col_style=’none’ ov_title=’yes’ text_title=” text_title_heading_tag=’h2′ text_subtitle=” text_subtitle_heading_tag=’h3′ rich_key=’text_data’ col_link=’none’ custom_link=” video_link=” image_link=” button_label=’More’ icon=” icon_hidden=” col_align=’left’ use_animation=” animation=’none’ animation_duration=’0.5′ animation_delay=’200′ animation_selector=’parent’ title_font_color=” title_font_font_size=” title_font_font_weight=” subtitle_font_color=” subtitle_font_font_size=” subtitle_font_font_weight=” text_font_color=” text_font_font_size=” text_font_font_weight=” button_text_color=” button_text_color_on_hover=” ]%3Ch2%3EConclusion%3C%2Fh2%3E%0A%3Cp%3EIn%20the%20above%205%20years%20alone%2C%20which%20were%20not%20among%20the%20most%20difficult%20stock%20market%20years%2C%20the%20difference%20in%20returns%20between%20a%20below-average%20and%20a%20very%20good%20wealth%20manager%20is%20around%2025%20percentage%20points.%20Cost%20differences%20of%20half%20a%20per%20cent%20per%20year%20are%20of%20little%20relevance%20on%20this%20scale.%20In%20concrete%20terms%2C%20provider%20A%20in%20the%20table%20above%20is%20actually%20slightly%20more%20expensive%20than%20the%20much%20better%20performing%20provider%20B.%20Of%20course%2C%20a%20historic%20good%20return%20is%20no%20guarantee%20of%20a%20good%20return%20in%20the%20future.%20However%2C%20data%20clearly%20demonstrate%20that%20there%20are%20lasting%20differences%20in%20the%20ability%20to%20generate%20good%20returns%20for%20customers.%20FinGuide%20looks%20for%20top%20providers%20in%20private%20banking%20for%20its%20clients.%20Thanks%20to%20our%20comprehensive%20database%2C%20which%20contains%20information%20on%20many%20other%20areas%20of%20the%20providers&squot;%20performance%2C%20we%20can%20find%20the%20right%20wealth%20management%20partner%20for%20you.%20You%20can%20find%20more%20information%20on%20our%20%3Ca%20href%3D%22https%3A%2F%2Fwww.finguide.ch%2Fen%22%3E%3Cstrong%3Ehomepage%3C%2Fstrong%3E%3C%2Fa%3E.%C2%A0%3C%2Fp%3E[/artlgnc_builder_page_widget][/artlgnc_builder_page_container][/artlgnc_builder_page_section]
Leave a Reply