MyPrivateBanking, a Switzerland-based independent consultant to wealth management clients, has said that a new service will assist clients of wealth managers to exploit their scope for cost reduction and re-negotiation of their fees.
According to MyPrivateBanking, the cost of wealth management is the single biggest lever a client has to increase the performance of his or her portfolio.
MyPrivateBanking said that the majority of clients lack the experience, time and knowledge to reduce their wealth management costs significantly. For their part, wealth managers, in addition to the direct, visible, fees, have various additional levers to influence the clients costs of wealth management in the selection of products, number of transactions or choice of partners.
Steffen Binder, managing director of MyPrivateBanking, said: “Our research shows that the direct and hidden costs can easily add up to 2%-3% of the assets per year, thereby eliminating about half of the annual profits a normal balanced portfolio will achieve on average in the long-term. We will help clients in identifying the portfolio costs that are really necessary and negotiate a better deal without hurting performance at all.”
Christian Nolterieke, managing director of MyPrivateBanking, said: “On average we cut the costs of wealth management for our clients by 40% per year. The Re-negotiation service of MyPrivateBanking is performance-based and self-financing. A part of the fees and commissions saved will be attributed to our services.”