Advice on dealing with Wealth Managers

Finance, Taxes, Banking, Insurance and Retirement
1
Hi all

I have for the last 4-5 months been contacted by multiple wealth management firms offering their services with advice on how to most efficiently invest my money using 2nd and 3rd pillars etc.

My first questions are whether I should actually bother with this? Does any of you out there use the services of a wealth management firm and are happy with it? If I have a scope of say 2 more years in CH before moving to another EU country, does it make sense?

Second, how is the best way to choose between firms in case I decide to go down the route? I suppose fees are one thing but are their other things like authorizations from Swiss authorities etc. that should be put emphasis on?

And are there any questions that you would recommend me to ask? I do not have experience with these people and I guess I have to be a little careful on who I trust with my money

I appreciate any advice.

And I apologize in advance if this topic has been raised before. My search did not yield any useful results.

2
Run away from anyone who contacts you, or someone who tries to sell any insurance based savings plan, however flexible it's claimed to be.

Switzerland doest not have any CGT so any product to save tax is likely to be unnecessary.

Pensions have many restrictions & are taxable when you take the money.

3
No.

Specially not with ones that approach you.

Banks here give quite good information. The thinking, further researching and deciding should be done by you.

4
A good rule of thumb is to never deal with any financial firm that cold calls you. No reputable firm I know of does this.

5
People that cold call get paid only commission, that commission will cost the policyholder about 2 years of investment capital, so a waste of time investment as you won't break even until 8-15 years.

6
Haha - I think anyone who uses the services of these companies have never visited EF! Thanks for all the feedback.

I it seems as if the verdict here is pretty strong that there is on reason to spend time on this. I have my personal account with UBS who also provide these services.

And I guess the general recommendation from you here is to speak with them first if I should have a desire to put my spare money somewhere.

7
Banks generally sell pretty poor investment products, so go slowly. If your not planning to stay in CH for 10 years or more I would not bother.

8
Yep.

The emphasis should be on << The thinking, further researching and deciding should be done by you>> though

9
Which, ultimately, makes totally sense

10
What you have to remember is that the tax regulations will be different in your next country. For example a UK ISA built up over many years (Previously PEPS) would be 100% tax free in the UK, however income totally taxable in Switzerland & it's part of your wealth.

11
Are you sure they're advising on 2nd Pillar investments?

I can understand them recommending Pillar 3b insurance products.

12
Agreed, including UBS who OP is a customer of already

I disagree, the shorter OP stays the more he should make use of 2nd and 3a pillars. Taxes saved are his returns. The less years until he can withdraw money the higher the savings per year. But there may be mandatory minimum durations, HR (2nd pillar) and bank clerks (3a) should know about conditions.

OP, talk to your HR about 2nd pillar payments, and to your bank about 3a. Insurance products for 3a are usually a very bad idea, see post #5. And don't use the services of any outside intermediary on any products for these two types, it's a waste of money and time.

13
They are pushy and often have only one agenda i.e. how to get access to your funds. Know of a friend who invested in one such 'scheme' and had to write off the entire principal when he left CH. I would avoid these folks with a barge pole. Recd. a call yesterday and told them that I already have a wealth advisor. That brought the conversation to a very quick and amicable end... :-)

14
Without knowing where the OP is going to live when he leaves CH this is potentially very bad advise. The payout from both 2nd & 3rd pillar could be taxed as ordinary income in the new jurisdiction. The payout can't be made whilst still resident in CH.

I live in Malta & have cashed in my Swiss pension & some of my UK pension. If I remit the money to Malta at any time in the future it becomes taxable in Malta.

15
If at least you could discuss this type of thing with these sales guys.

In reality they stick to their sales script, they hesitate when you challenge them even with the simplest of questions and are quite obviously interested in the sale and not in helping you.

16
The way I understand it, they are stopping people from doing that now. You won't be able to take a lump sum & run.

17
They only want the best from you. Your money.

One question: How much do I get back when I withdraw all in 1 year, 2 years, 5 years, and 10 years. For simplicity assuming a performance of 0% per year.

The benchmark to compare is a pillar 3a bank account where you will get back exactly as much as you paid in.

Do not expect a straight and direct answer to that questions.

18
Thats sad as mine has hugely grown since I cashed it in. The restrictions I believe are only on the obligatory part IIRC.

19
a swift kick to the nuts

20
If you stick cold calling or financial advisers or financial advice into the search box you'll get some results that might be useful.

It's also possible to use Google to search the site by putting whatever you're looking for into the Google search box, in quotation marks to narrow it down further if necessary, and put site:englishforum.ch alongside it.