Cost efficiency in asset management through competition

As the saying goes: “Giving a banker a suitcase of money and telling him to make the most of it is like ordering a dog to guard a pile of sausages.”

The Swiss financial center is undoubtedly one of the best in the world, and the wealth management offering in particular is outstanding and highly competitive. However, in order to enjoy a top offer as an investor, it is essential to allow transparency and competition to play a role in the evaluation of offers - as in all other service areas. If you blindly leave it up to your house bank or trusted asset manager to put together the offer, the result will be excessive conditions.

A comparison of conditions by the financial portal Moneyland reveals that an asset management mandate incurs an average fee of 1.37%. Added to this are the so-called TER costs of the investment vehicles used in the mandate. As a rule of thumb, the total cost ratio for non-competitive asset management is between 2% and 3% of the invested mandate assets per year.

But there is another way! By applying transparency and competition when evaluating providers, a total cost ratio in asset management of 0.6% is already possible for assets of CHF 50,000 - regardless of the investment strategy.

The resulting cost difference is substantial. Let's do the milk carton calculation and invest assets of CHF 500,000 over 20 years with a balanced investment strategy and an expected investment return before costs of 4% per year.

With a competitive asset management solution (0.6% costs per year; net return 3.4%) you will have saved CHF 976,000 after 20 years, with a non-competitive solution (2.5% costs per year; net return 1.5%) just CHF 673,000. Competition is definitely worthwhile!

The Economico comparison portal offers a low-threshold and simple way to bring transparency and competition to asset management. With just a few clicks, you can compare the best and most competitive asset management offers from those providers who are prepared to face up to the competition. Try it out right here!