New Guide: How Clients Can Cut Costs of Wealth Management

Clients of investment advisors and private banks often pay too much for their asset management. Those costs should not exceed 1% of the invested asset. Nevertheless intransparent pricing models make it difficult for clients to identify possibilities to cut costs. The free guide of explains the cost drivers and pricing models of distributors of investment products and how clients can cut costs of asset management by rather simple means.

Zurich, Switzerland, September 30, 2009 --( With rather simple measures clients of wealth managers can reduce their costs of wealth management significantly. Overall clients should not pay more than 1% per year of their total assets for wealth management. This is a main result of the new guide “Cut the Costs of Wealth Management” ( Based on in-depth research and analysis of cost structures of clients portfolio and pricing schemes of wealth managers this free guide details various ways on how clients can cut their costs.

The main recommendation is that clients have to understand the costs drivers and pricing models better to be able to cut costs. However, the pricing models offered by most wealth managers are often intransparent and only report the direct costs either as a “flat-fee”, “transaction fee” or “performance fee”. Many clients are not aware of various indirect costs, hidden in many products and services, easily doubling the direct costs of managing a portfolio.

“Widely used vehicles to hide costs are funds and structured products which can cost up to 5% per year”, explains Christian Nolterieke, Research Director of “In a pricing model based on transaction-fees a higher-churn of the portfolio generates extra costs and often not all transactions are required respectively beneficial to the investor.”

Most of the clients are not aware that a huge chunk of the hidden costs charged by fund providers are actually returned to the wealth managers as a reward for “encouraging” investors to choose their products. Overall, these kickbacks to the wealth manager can make up to 50% of what the client pays to the bank.

By rather simple measures, detailed in the guide, clients can gain transparency and take control over costs:

1) Choosing a strategy and a particular wealth manager best for their investment personality and amount.

2) Pushing the wealth manager for full transparency, the use of cost-effective products, and full disclosure and payback of all kickbacks and commissions.

3) Choosing a price-competitive wealth manager by meeting various wealth managers, assessing their competence and requesting an offer.

4) Opting out of all services provided by the wealth manager that are not required, or that can be done somewhere else at a cheaper rate.

Finally, and very important: Clients should negotiate. As Steffen Binder, Managing Director points out: “There is plenty of room for fee reductions. Clients should educate themselves about the market and communicate precise and determined their requirements; and within minutes they can save a lot of money.”

About is an independent platform for information and networking for wealthy private clients across the world. Established in 2009 in Switzerland, offers a variety of information to assist investors in making their decisions. This includes in-house research, articles and updates related to wealth management, detailed bank directories and client evaluations of wealth managers across the world. The interactive “MyWealth” online network allows the clients looking for asset managers and private banks to get in touch with one another and exchange experiences. aims at making wealth management more transparent, more cost effective and giving it a greater client focus. For further information please check

Christian Nolterieke
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