More Wealth, Lower Fees: These 3 Levers Ultimately Determine Your Success

📌 In Brief: Fees, ongoing costs, and taxes are often the invisible return killers. Those who understand and systematically optimize them can achieve more from their investments in the long run.

When it comes to investing, everyone talks about returns. However, in practice, something much more mundane often determines how much actually ends up in your pocket: fees, ongoing costs, and taxes.

The problem: These deductions are rarely "loud." They appear in the fine print, are automatically deducted, or are hidden within products. And that’s exactly why they are underestimated. Over years and decades, they can take a significant portion of your returns—especially in long-term wealth accumulation.

In this article, I will show you the most important cost blocks, typical pitfalls, and clear benchmarks so that you can set up your investments cost-effectively and tax-efficiently.

Fees for Accounts & Deposits: Why "Fixed Costs" Can Become Expensive

Account and deposit management fees are costs that arise whether you trade or not. Because they are automatic, they are often overlooked.

Typical models:

• Flat Fee (fixed per year)

• Percentage (e.g., x% of the deposit value)

• Minimum Fee (often disproportionate for small deposits)

• Additional Fees (e.g., for securities transfers, real-time quotes, special reports)

What I pay attention to in practice:

• Does the fee model fit your deposit volume?

• What costs arise with multiple currencies/exchanges?

• Are there fees if you "do nothing" for an extended period?

Costs in Funds & ETFs: TER, Spreads, and Hidden Product Costs

In the case of funds and ETFs, costs are not just "a number." Many investors see the TER (Total Expense Ratio) and think that everything is covered. This is not the case.

What the TER Typically Covers

• Management & Fund Management

• Administration/Reporting

• Custodian Bank/Custody

• Index Licenses (for ETFs)

Which Additional Costs Often Arise

• Sales Charges (especially for actively managed funds)

• Transaction Costs within the Fund (purchases/sales in the portfolio)

• Bid-Ask Spreads (when buying/selling)

• Performance Fees

• Swing Pricing / Price adjustments for large inflows/outflows

Benchmarks (roughly):

• Broad, global equity ETFs: TER often 0.1–0.3%

• Thematic/Specialty ETFs: TER more like 0.5–1.0%

• Actively managed funds: often 1.2–2.5% (plus possibly additional costs)

Taxes When Investing: Properly Classifying Stamp Duty, Withholding Tax & Co.

Taxes are also costs—only they often feel "inevitable." Nevertheless, it is worthwhile to know the most important mechanisms.

Stamp Duty (Transaction Tax) in Switzerland (simplified)

• Domestic Securities/ETFs: 0.075% per purchase/sale

• Foreign Securities/ETFs: 0.15% per purchase/sale

Practically, this means: The more you trade, the more the stamp duty impacts you.

Other Typical Tax Issues with ETFs

• Withholding Tax (35%) on Swiss distributions (refundable in the tax declaration)

• Income Tax on dividends/distributions

• Wealth Tax on the tax value as of December 31

• Foreign Withholding Tax (partially refundable depending on domicile/structure)

Practical Tip: For US-heavy indices (e.g., MSCI World), an ETF with Irish Domicile (ISIN often starts with IE) can be tax advantageous—depending on structure due to lower US withholding tax on dividends.

Fee Comparison & Cost Benchmarks: When Is It "Too Expensive"?

A few rough guidelines (depending on strategy, deposit size, and service scope):

• Account Fees: ideally 0.0–0.3% p.a.

• Order Fees: for small orders up to CHF 5,000 often reasonable: ~CHF 10 per trade as a benchmark

• ETF-TER (broad): 0.1–0.2% very good

• Asset Management: often 0.5–1.75% p.a. (depending on support/complexity)

Nothing Is Truly Free: Beware of "Free" Offers

"Free" almost never means free in the financial world—the returns are often simply taken from another place (e.g., through spreads, poorer execution, higher product margins, or opaque fee models).

The crucial question is: Would you rather pay a clear price upfront—and if so, how much better off would you be in the end?

If no one can answer this question clearly and understandably, I would steer clear of this lack of transparency.

Saving on Fees Without Sacrificing Returns: Here’s How to Proceed Systematically

1. Create a Cost Inventory: Account fees, order costs, product costs, taxes.

2. Prioritize Simplicity: Fewer trades, clear strategy, few core products.

3. Create Transparency: Check/agree on all-in fees, clarify retrocessions.

4. Consider Taxes: Domicile, withholding tax, declaration.

5. Secure Behavior: The biggest costs often arise from timing mistakes.

Costs Are One Thing—Performance Is Another

Optimizing costs is an important lever. But in the end, the performance of your strategy and implementation also counts.

If you want more performance than the average, it often requires some out-of-the-box thinking. Because when everyone does the same thing, you will ultimately get similar results in the long run.

This is exactly where a good advisor makes a difference: not just in "becoming cheaper," but in setting up better (strategy, implementation, behavior, taxes, support).

Questions or Account Check: "How Does It Look for Me?"

If you want to know how high your fees, costs, and taxes really are in your account (and where there is potential for optimization), feel free to contact me.

• Visit the homepage: finanzberatung-rubino.ch

• Book a consultation appointment

Disclaimer and Clarification

This blog post was not sponsored by anyone and reflects solely my personal opinion.

Investments involve risks and can lead to the total loss of the invested capital in the worst-case scenario.

This blog post is based on the initial publication

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