Fees When Investing: Wealth Management, Portfolio, Shares and Funds

For most investors, costs matter just as much as returns, and they are harder to see. Fees arise at different levels depending on the service, and they are not always disclosed explicitly. This makes it difficult for clients to aggregate the total cost into a single figure, which is why comparing costs between providers is not straightforward. The type of service matters here: execution-only brokers and discretionary mandates carry different cost structures.

Fees when investing cover all the costs incurred when investing wealth: for the wealth management service itself, for managing the portfolio at the custodian bank, and for the investment instruments used. They are charged at different levels, some disclosed openly, some implicit through spreads or exchange rates, which makes it harder to compare providers.

In this article, we look at which fees can specifically arise with a discretionary mandate, to create transparency and awareness.

The key points at a glance

• Management fees for classic discretionary mandates in Switzerland typically range between 0.00% and 1.50% per year of the assets under management (Source: vermoegens-partner.ch, as of 2022).
• Digital wealth management offerings showed total costs of around 0.6% to 0.9% per year in a market comparison (Source: K-Geld/Blick, February 2026).
• In the same comparison, annual total costs ranged from 0.64% to 2.17%. On an investment of CHF 500,000, that puts around CHF 7,700 a year between the cheapest and the most expensive provider (Source: K-Geld/Blick, February 2026).
• Fees arise at three separate levels, service, portfolio and investment instrument, which are rarely combined into a single disclosed figure.
• Front-end loads on actively managed equity funds can amount to up to 5% of the amount invested.

What types of fees exist when investing?

Fees when investing arise at three levels: with the wealth management service itself, with managing the portfolio at the custodian bank, and with the individual investment instruments such as funds or structured products. Each level has its own fee types with different ranges, which do not exclude one another and can add up.

This also becomes clear in the following table:

Fees when investing at a glance. Source: vermoegens-partner.ch

These ranges come from a 2022 survey and serve as a guide. Individual providers may deviate from them, but the underlying structure of the three levels still holds.

Service fees

These are fees tied to providing the wealth management service itself. They can depend on the asset class, so fees may rise with the equity share.

Management fee for wealth management

The management fee applies to every discretionary mandate and is usually calculated as a percentage of the assets under management per year. It is often communicated very explicitly and can include different components.

This fee compensates the wealth manager for their work of monitoring and managing the portfolio, and analysing and selecting individual investment instruments. This is the most labour-intensive part, so the management fee makes up the largest share of the total cost.

• The more individual the client’s requirements, the more effort is involved in wealth management, which can raise the management fee.
• This can often be offset by a larger investment, since many managers offer a tiered fee that decreases as wealth grows. If this fee is unusually low, providers are likely compensating through other methods.
• Digital wealth management offerings (robo-advisors) charge noticeably lower fees, since the degree of standardisation is high and clients have no personal point of contact. The market comparison mentioned above shows total costs of around 0.6% to 0.9% per year for them. That figure covers all three levels together, service, custody and product costs, and is therefore not comparable with any single row of the table above. At classic private banks, the management fee can reach up to 1.5% per year. In return, clients gain a personal point of contact and a discretionary mandate.

Performance fee for wealth management

This fee is charged as a percentage of the return generated by the wealth manager and is rather unusual in classic discretionary mandates. In the hedge fund space, this fee is widespread and is usually only charged above a certain minimum return, the so-called hurdle rate.

The idea behind this fee is to align the manager’s incentives with those of the client. But since the management fee already rises in proportion to the assets under management, that alone should be incentive enough from a financial perspective to grow the client’s wealth.

Entry fees for wealth management

An entry fee is sometimes charged, though this is rather rare. It is calculated once, as a percentage of the amount to be invested. These fees are tied to the initial effort involved in setting up a mandate.

While this is rather uncommon in wealth management, this fee is applied more often when arranging financial services, sometimes also called a “finder’s fee”.

Portfolio fees

The group of portfolio fees covers all fees tied to managing a specific investment portfolio. These fees are partly beyond the wealth manager’s control, especially when it comes to an independent wealth manager. The custodian bank, which holds the securities and executes the transactions, sets the level of these fees.

Custody fee

The custody fee is a charge for safekeeping and administering the securities. These are held at the custodian bank, which in turn charges a fee as a percentage of the custody value, usually capped at a certain amount.

• The level of the fee often depends on how many additional services the bank charges for. Custody fees are also often tied to transaction costs or a certain level of trading activity.
• Low custody fees are therefore often offset by higher transaction costs, or a minimum number of transactions must be carried out per quarter to avoid an “inactivity fee”.
• Higher fixed custody fees, however, often come with lower transaction costs. Which cost model is more favourable depends heavily on the volume and frequency of transactions.
• On top of the custody fee, some banks charge a separate account management fee for the cash account, billed annually per account.

Administration fee

In addition to custody fees, custodian banks can charge fees for special administration of the portfolio. This includes, for example, booking coupons and dividends or recording corporate actions.

Some banks, however, charge each item individually rather than a flat administration fee. In general, this fee is less common today, since the costs are often already included in the custody fee.

Foreign currency fees

We now turn to a fee that is probably one of the most underestimated, and at the same time least transparent: foreign currency fees. This fee arises when securities are traded or held in foreign currencies.

• The bank charges for the custody of securities held in foreign currency, shown in the table as the foreign currency holding surcharge, and separately for the purchase or sale of those securities, shown as the currency conversion spread. The holding surcharge is rather rare; a charge on foreign currency transactions is common.
• This is what is known as a “spread”. The spread is the difference between the bid (buy) and ask (sell) price. In simple terms, these are the prices at which a dealer is willing to buy or sell an asset.
• The dealer, also called a “market maker”, earns money because the bid price is lower than the ask price. In other words, they buy at a lower price than they sell. The bank takes a fee on a foreign currency transaction by giving the client a worse exchange rate than the current market rate for the transaction. For example, a client now pays a higher price than the current market price for the US dollars needed to buy a US share. This also works in reverse when a foreign currency holding is sold.

The overall effect of this fee depends on how often and how much is traded in foreign currencies. That is why it is difficult to disclose this fee upfront. The lack of transparency mentioned earlier has two sources. Spreads differ by currency, and the exact size of the fee only becomes visible once the client checks the statement of the foreign currency transaction and compares the applied exchange rate with the market rate valid at that time. If the exchange rate charged is not even stated explicitly, it must first be calculated. Many clients are often unaware of this implicit fee, since only a few providers disclose it clearly. So an offer that looks cheap at first glance may not actually be that cheap in the end.

Transaction costs or brokerage

Transaction costs are, alongside the custody fee, one of the most common costs incurred. This fee applies to the transactions carried out themselves and can, depending on the provider, be structured either as a percentage of the traded volume or as a fixed amount per transaction.

The custodian bank charges this fee to cover its own costs incurred through trading activity. Part of it consists of costs charged by exchanges and brokers, which the bank passes on to the client. The level of these costs depends heavily on the exchange, the currency, the investment instrument and the volume traded. This is why it is important not to underestimate these costs, especially when a portfolio is managed more actively and transactions are carried out regularly.

Position fee

The position fee, as the name suggests, is charged by some banks per position, in addition to the custody fee. The level of this fee often varies by asset class and can be waived entirely for the bank’s own products. In discretionary mandates, this fee is rather unusual, whereas it is applied more often in advisory mandates.

Instrument fees or product costs

The final and lowest level of fees applies to individual instruments and products within a portfolio. These costs depend heavily on the type of product and the underlying asset class. ETFs, for example, are cheaper than investment funds, and equity products are often more expensive than other asset classes.

The general rule: costs only arise for products with an issuer or provider behind them, such as ETFs, investment funds or structured products. For instruments such as shares or bonds, these do not arise, since they do not need to be actively managed or constructed.

Securities spreads

We already touched on so-called “spreads” earlier when discussing exchange rate fees. These can also arise on securities themselves. This is fundamentally tied to a security’s liquidity and therefore again depends heavily on the instrument itself.

Liquidity, put simply, indicates how easily a security can be traded without affecting the current market price. Sufficient liquidity is provided by so-called “market makers”, who continuously quote binding buy and sell prices and step in as the counterparty even when no other buyer or seller is available at that moment. This ensures that market participants can carry out their desired transactions even in less liquid markets.

The market maker earns this margin by buying slightly cheaper and selling at a slightly higher price than the “fair” market price. Clients cannot directly influence these costs in wealth management, and they are generally not easy to quantify either. For the sake of completeness we have listed them here, but in practice they rarely carry much weight.

Front-end load

The so-called front-end load is a fee charged when buying investment funds. It is calculated as a percentage of the amount to be invested and can reach up to 5% for actively managed equity funds.

Because this fee applies on every purchase, it stands out especially with regular contributions. Banks often waive the front-end load for clients on their own products, to make them more attractive.

Management fee for funds

The management fee is also an important cost item in connection with investment funds. These costs are charged for the management by the fund manager. It can be compared with the management fee at mandate level: in both cases, a manager, whether a wealth manager running a mandate or a fund manager running a pooled investment fund, is paid for managing the underlying assets.

A distinction is made between actively and passively managed investment instruments: active instruments actively try to outperform the market, while passive products replicate an index or the market. Because of the greater effort involved in the first case, the fee is correspondingly higher. ETFs also have a management fee, though it tends to be significantly lower than for most investment funds, since they follow a passive approach.

Sales commissions

The sales commission is a specific type of fee that arises mainly in connection with structured products. Issuers of these products charge for the effort of constructing and managing them. The fee is a percentage of the amount to be invested and is charged directly against the issue price.

Structured products are a special type of instrument and belong to the “alternative investments” asset class, which is why only a small part of a portfolio is invested in them, if any.

Why fees when investing cannot simply be added up

The three fee levels are not independent of one another: a low management fee can go hand in hand with higher transaction costs, a cheap custody fee with more expensive fund products. Anyone comparing only a single item does not see the real total cost. What matters is the sum of all levels over one year, relative to the entire invested wealth.

When comparing two offers, it is worth looking at the following points:

• Total cost per year in francs, not only as a percentage. For smaller amounts of wealth, fixed fees such as account management or position fees have a stronger effect than for large amounts of wealth, where percentage fees dominate.
• Whether transaction and foreign currency costs are already included. A low percentage for the management fee says little if brokerage and spreads are charged separately without a clear cap.
• Whether a fee tier structure exists. Many providers reduce the percentage as wealth grows. An offer that looks more expensive at first glance can become cheaper above a certain amount.
• What basis the fee is calculated on. Some providers calculate the management fee on total wealth, others only on the invested portion, which makes a marked difference for a high cash allocation.

Such a comparison takes time and requires the complete contract documents of both providers. Anyone who only compares the management fee advertised on a website rarely sees the actual overall cost.

Frequently asked questions about fees when investing

How much do wealth management and investing cost in Switzerland?

It depends on the service you choose. Classic discretionary mandates typically charge a management fee of 0.00% to 1.50% per year, plus custody, transaction and product costs. Digital wealth management offerings showed total costs of around 0.6% to 0.9% per year in a market comparison (Source: K-Geld/Blick, February 2026). What matters is always the sum of all levels, not a single fee.

What is the difference between a management fee and a custody fee?

The management fee compensates the wealth manager for handling the mandate, meaning the analysis, selection and ongoing monitoring of investments. The custody fee, by contrast, is charged by the custodian bank for safekeeping and administering the securities. The two are charged independently of each other and often come from different providers.

Why are foreign currency fees often hard to spot?

Foreign currency fees are usually not shown as a separate line item, but are charged through an exchange rate that deviates slightly from the current market rate. A client only sees this so-called spread by comparing the statement with the market rate that applied at the time of the transaction. Without that comparison, the fee stays invisible.

What is a front-end load on investment funds?

The front-end load is a one-off fee charged when buying an investment fund, calculated as a percentage of the amount invested. For actively managed equity funds, it can reach up to 5%. Banks often waive it on their own products to make them more attractive.

Why are fees from different providers hard to compare?

Because they arise at different levels and are rarely summarised in a single figure. A low management fee can be offset by higher transaction costs or more expensive fund products. A comparison is only meaningful if the total cost over one year, relative to the entire invested wealth, is set side by side.

Are ETFs cheaper than actively managed investment funds?

As a rule, yes. ETFs follow a passive approach and track an index, which is why their management fee is usually markedly lower than for actively managed investment funds. The greater effort for analysis and selection in active management is typically reflected in a higher fee.