These fees apply when investing in Switzerland

ETFs (exchange-traded funds), known for their efficiency and transparency, enable private investors to build up assets over the long term via diversified portfolios at relatively low cost. However, while the direct costs of an ETF are often transparent and comparatively low, there are various, sometimes hidden fees that can affect the overall picture.

Below is an overview of custody account fees, product costs, asset management fees, brokerage fees, stock exchange fees, stamp duties, exchange surcharges, retrocessions and other costs.

Custody account fees

Custody account fees are charged by banks and online brokers for storing and managing your securities in a custody account.

Custody fees can be quoted either as a fixed amount per year or as a percentage of the assets held in custody, and they vary greatly depending on the provider and the services offered. While these are often seen as low, they can add up to a significant sum over time, especially for large investment volumes and a long-term investment horizon.

It is worth comparing the fee structure of different providers: For example, some institutions offer tiered fee models where the fees decrease as the investment volume increases. Others offer low or no custody account fees to attract new customers, which can be particularly attractive for investors with smaller portfolios.

At True Wealth, our focus is on making investing as accessible and cost-efficient as possible. That's why we don't charge custody fees. The costs are already covered by the asset management fee.

Our custody fees: none

Product costs (TER)

The Total Expense Ratio (TER) represents all costs incurred within an ETF and has a direct impact on your net return. These product costs include management fees, which the fund company charges to the fund assets for its portfolio management, as well as operating costs, which include audit fees, legal costs and other administrative expenses. The TER is expressed as a percentage and taken directly from the fund assets each year, which means that investors do not pay these costs directly, but rather feel them in the form of a lower return.

At True Wealth, we attach great importance to cost efficiency and transparency. For this reason, we select ETFs with the lowest possible TER for our clients' portfolios. By focusing on cost-efficient ETFs, we help our investors to minimize the total cost of their investments and thereby maximize their long-term returns.

Our TER: approx. 0.13% for the global portfolio and 0.21% for the sustainable portfolio

Asset management fees

Asset management fees, also known as wealth management fees, are charged for the professional composition and ongoing management of an investment portfolio. These fees cover the selection of investment instruments, strategic allocation and rebalancing measures aimed at keeping the portfolio in line with the investor's investment objectives and risk tolerance. These fees are typically expressed as a percentage of assets under management and are calculated annually or quarterly.

True Wealth offers a cost-effective wealth management solution specifically designed to minimize costs for investors. True Wealth's asset management fee of 0.25%-0.50% (depending on the amount invested) is competitive and transparent. Investors therefore know exactly what they are paying for. This fee covers all wealth management services, including custody account management, buying and selling ETFs and rebalancing. By bundling these services into a single, straightforward fee, we promote a clear and simple cost structure for clients.

Our fees: 0.25%-0.50% for wealth management, 0% for Pillar 3a

Brokerage fees

Brokerage fees are the charges incurred when buying or selling securities and are levied by banks or brokers for the execution of transactions. The amount of brokerage fees can vary depending on the provider, the volume traded and the type of securities. As a rule, a brokerage fee is charged as a fixed amount or as a percentage of the transaction volume.

Our fees: None. Brokerage fees are included in our asset management fee.

Stock exchange fees

Stock exchange fees are fees incurred for the use of the infrastructure of stock exchanges for buy and sell transactions. These costs are charged directly by the exchange operators and passed on to investors. Even if these fees are relatively low, they contribute to the overall cost burden and must be taken into account when calculating the net return.

Our fees: None

Stamp duty

The stamp duty is a specific tax levied in Switzerland on trading in securities. It applies to transactions in both Swiss and foreign securities and is calculated as a percentage of the transaction volume. Stamp duty can have a significant impact on the cost of buying and selling securities and should be taken into account when planning investment strategies.

For ETFs domiciled in Switzerland, the cost is 0.075% percent, for foreign ETFs it is 0.15%. While no stamp duty is payable on domestic index funds, a stamp duty of 0.15% is also payable on foreign funds.

Our fees: 0.075% - 0.15% for ETFs, 0% for domestic index funds

Currency exchange fees

Exchange rate surcharges arise when investments are made in a currency other than the investor's home currency. They reflect the difference between the buying and selling price of a currency. These premiums can affect the return on investments denominated in a foreign currency, especially if there are large currency fluctuations.

True Wealth takes care to keep exchange rate mark-ups as low as possible for its clients and to avoid unnecessary currency conversions altogether. This starts with the selection of ETFs, which also takes into account the trading currency. Furthermore, each customer receives four accounts in four currencies with a personal IBAN in order to avoid unnecessary currency conversions. In addition to the Swiss franc, these are the euro, US dollar and British pound. This means that you can also deposit your foreign currency balances free of charge.

Our fees: None of our own. The account-holding custodian banks charge approx. 0.1% on the interbank rate.

Bid-ask spreads

The bid-ask spreads that are unavoidable when investing in securities should also not be neglected. This is because with all securities, including ETFs and, as a rule, index funds, the price for buying a security is always slightly higher than the price for selling the same security. This bid-ask spread is generally smaller for liquid securities with a high trading volume and larger for less liquid securities.

Like brokerage fees, stock exchange fees and stamp duty, bid-ask spreads are incurred when trading securities. Although bid-ask spreads are not actual costs, they can nevertheless reduce your return.

At True Wealth, we therefore pay attention to low spreads in addition to the TER (see above) when selecting ETFs and index funds.

Even better: in our Pillar 3a, countless transactions do not have to be executed on the open market at all. Thanks to pooling and netting in the pension foundation's account, numerous securities and foreign currency transactions can be offset internally, which leads to cost savings that we pass on in full.

Our bid-ask spreads: On average approx. 0.10% on the transaction volume (depending on the investment strategy and the investment instruments used).

Retrocessions

Retrocessions are reimbursements paid to financial service providers for brokering products or services to their clients. Retrocessions are rightly criticized as they represent an incentive to use expensive investment instruments and can therefore lead to conflicts of interest. In the current debate about retrocessions, the focus is on transparency and investor interests.

True Wealth does not receive kickbacks or retrocessions and does not work with hidden fees. Instead, we focus on offering a transparent and easy-to-understand cost structure that is in the best interests of clients. This approach promotes integrity and trust in the relationship between the investor and the financial services provider.

Our fees: None

Tax documents

Many banks still fleece their customers when it comes to tax documents; after all, hardly anyone thinks about this point when opening an account. The electronic tax statement is also a convenient aid when completing your tax return, which should be a matter of course these days.

At True Wealth, you can download the detailed Swiss «eTax Statement» free of charge shortly after the start of the year. You can then conveniently upload the tax statement in PDF format to your electronic tax return. No more tedious typing of individual items – saving you time and money.

Our fees: None

Conclusion

Understanding and minimizing the various fees and costs is critical to long-term investing success.

By choosing a provider like True Wealth, with its transparent fee structure and cost-conscious investment strategy, investors can minimize these costs and maximize their long-term return opportunities.

By focusing on passive investment strategies and carefully selecting ETFs with low costs, True Wealth helps investors manage their assets efficiently and grow them over the long term. This approach also reduces the temptation to trade actively, avoiding the underestimated indirect costs of active trading alongside the direct costs.

Our fees page gives a good overview of all the costs involved in our asset management.