Advice on dealing with Wealth Managers

Finance, Taxes, Banking, Insurance and Retirement
21
Thanks all to replying to this thread. It gives me and hopefully also others in the same situation something to think about before jumping on the bandwagon. In general, this part of life is not something I am used to and I have never experienced this interest for investing my money prior to moving to CH despite having reasonably payed jobs outside CH before.

Feel free to share further advice or experiences as I consider it very useful.

One thing I have looked at are certifications. E.g. whether the company that calls you is FINMA certified or not. I do not know whether such certifications carry any value regarding their products but I suppose that at least it should eliminate the risk that it is a scam.

22
Not really. Insurance-linked pillar 3a companies will easily scam you out of money by misrepresenting the product and not giving a shit about your best interests when selling it, but I'm sure legally it's all OK and well tolerated by FINMA

23
Ask about their fees and their fee structure. Then think it over is it is expensive to deal with them or not.

24
There are restrictions on drawing down the lump sum on departure; these apply to the mandatory part and depend on a number of factors, including the country you leave to.

If you make an additional contribution to the pillar 2, You will lose the tax deductibility on any additional contribution you made in the prior 3 years as well as paying the drawdown tax on the full amount.

However, if you make a pillar 2 buyback, there's no obligation to drawdown the pension savings when you leave Switzerland. You could transfer them to a libre de passage based in Schwyz and when you are ready to drawdown, drawdown tax will be lowest rate in the whole of Switzerland at 4.9%.

25
The taxation of that pension in your new country of residence is the issue, as it won't be paid out until your tax resident elsewhere. The Swiss withholding tax rate is irrelevant, possibly reclaimable in full then taxed at income rates in the new country of residence.

26
I suppose this depends on whether there is a double taxation treaty in place?

My understanding is that if you have payments originating from CH and these are taxable in CH but you live/are liable to pay tax in another country with a double taxation treaty with CH, these payments are only taxed in CH and not in your country of residence (depending of what is stipulated in the treaty of course).

27
Double taxation agreements do not mean that it's only taxable in 1 place, just some credit is given for existing tax paid. The precise wording is also very important.

Often a DTA allows the country paying the income to not tax the money in the first place, the UK is an example as it's possible for a UK non resident to receive their UK pension income free of UK tax assuming it's taxable somewhere else. Cyprus taxes pension income at 5% for example.....

The Swiss DTA allows for Swiss withholding tax to be reclaimed on a lump sum pay out if tax is paid in the new country.

28
I agree - it is all down to what is written in the particular agreement and one has to be very careful. What option is the best all depends on where you go in the future and it can be hard to predict sometimes

As an example of the opposite of your UK example, it is possible for a Danish non resident to claim Danish pension but the payments are taxable in Denmark as the Danish tax authorities policy is that pensions are taxable in the country that has provided the tax credit during the work life of the pensioner. For this very reason, Denmark cancelled double taxation agreements with Spain and France because they would not have this written into the agreements.