Costs and taxes, Switzerland
You cannot control the market. You can control almost everything else: the custody fee, the currency spread, the stamp duty, the fund cost and how much tax you hand over unnecessarily. Here is the list I worked through myself when I left my Swiss bank.
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Most Swiss banks charge 0.2% to 0.4% of your whole portfolio every year, whether markets rise or fall. On CHF 200,000 that is CHF 400 to CHF 800 a year for storage. Interactive Brokers charges nothing for a normal account, so this line simply disappears.
A Swiss bank typically takes around 1% each time you turn francs into dollars. Interactive Brokers converts at close to the interbank rate for about 0.002%, minimum USD 2. If you invest CHF 500 a month in a global fund, that gap alone is worth hundreds of francs a year.
Swiss securities dealers charge 0.075% on Swiss securities and 0.15% on foreign ones. An account held outside Switzerland is not subject to it. That is 0.15% saved on every single purchase of a foreign fund.
A globally diversified index fund costs 0.06% to 0.22% a year. An actively managed Swiss bank fund often costs 1.2% or more and, on average, does not make that back. Choosing the cheap fund is the easiest decision on this page.
Every order has a fixed cost. Buying once a month instead of once a week cuts your commission bill by roughly three quarters without changing anything about your strategy.
Reinvesting instead of leaving cash idle is free and compounds. Cash sitting uninvested is a cost you never see on a statement.
Switzerland taxes what you own rather than what you gain, which is unusually friendly to long term investors. These are the rules that shape the decisions.
If you buy and hold as a private individual, the profit when you sell is not taxed in Switzerland. This is the single most valuable feature of the Swiss system for a long term investor. Trading frequently with borrowed money can get you reclassified as a professional trader, which is the main reason buy and hold is the sensible default.
Cantons tax net wealth at roughly 0.1% to 0.7% a year, above tax free allowances that differ by canton and civil status. It applies to the value of your portfolio on 31 December, minus debts such as a mortgage. Where you live matters far more than which broker you use: rates differ by several multiples between cantons.
Dividends and interest count as income in the year you receive them. Funds that accumulate instead of distributing are still taxed on the income they earn, so accumulating share classes do not avoid this.
US funds withhold 15% on dividends for Swiss residents who have filed a W-8BEN. You get that back by filing the DA-1 form with your tax return, using the withholding tax report from your broker. It takes a few minutes and it is real money.
Paying into pillar 3a lowers your taxable income each year, and the assets are outside wealth tax until you withdraw. Voluntary pension fund buy-ins work similarly. Both are ordinary parts of Swiss financial planning, not loopholes.
Mortgage debt reduces taxable wealth and mortgage interest reduces taxable income. This is why many Swiss households invest while carrying a mortgage rather than paying it down aggressively.
Tax rules differ by canton and by personal situation, and they change. This is general information from a private investor, not tax advice. Check with your cantonal tax office or an adviser before acting.
Moving to a broker without custody fees, without stamp duty and with near interbank currency conversion removes most of the list above in one afternoon.