Private Banking vs Independent Wealth Management – which is cheaper?
Most investors think about performance and reputation when choosing a wealth manager. But the real difference is often hidden in the fees and costs you actually pay. Custody fees, mandate fees, hidden product margins, ticket fees – they all reduce your returns. The problem: private banks are not always transparent, while independent wealth managers often disclose every charge.
In this article, we compare Private Banking fees with Independent Wealth Management costs. And because numbers speak louder than words, you can also use our free Wealth Management Fee Comparator Tool to calculate your own costs. Simply enter your Assets under Management (AUM) and your annual portfolio turnover, and see the results in seconds.
Why Costs Matter in Wealth Management
- Custody Fees: Higher for private banks, lower for independent managers.
- Mandate Fees: Similar ranges, but independents are often more flexible.
- Transaction Costs: Private banks hide them in spreads, independents show ticket fees.
- In-house Products: Private banks often add hidden costs of 0.25%–0.75% p.a.
Even slight differences add up. On a CHF 20 million portfolio, just 0.25% in hidden costs means CHF 50,000 lost every year.
Calculate Your Own Costs
Use our interactive fee calculator to compare Private Banking and Independent Wealth Management. Enter your portfolio size and turnover, and see the difference in black and white.
Private Banking vs Independent Wealth Management — Simple Cost Comparator
Your inputs
Private Banking (Direct client)
| Total (yearly) | — |
|---|---|
| Total (% of AUM) | — |
Independent Wealth Management
| Total (yearly) | — |
|---|---|
| Total (% of AUM) | — |
Method (fixed)
- Turnover applies to full AUM: traded value = AUM × turnover% (buy + sell combined).
- Asset mix fixed at 50% equities / 50% bonds.
- PB trading cost = 0.40% on equity trades + 0.20% on bond trades (on traded value).
- IWM trading cost = ticket CHF 125 per trade side. Number of sides = traded value ÷ (5% × AUM).
- Custody floors: PB CHF 1’500; IWM no minimum.
- Mandate fee (discretionary) = 1.00% p.a. on AUM (both columns).
- PB in-house (hidden cost) adds +0.25% p.a. on AUM (toggle above).
- Taxes, FX, stamp duty, extra TERs beyond in-house uplift are omitted for simplicity.
Understanding the Results
Private Banking: Higher custody, plus hidden in-house product costs if used. Transaction costs are bundled into spreads and not always visible.
Independent Wealth Management: Lower custody (no minimums), transparent ticket fees, and usually access to cheaper ETFs and institutional funds. The result: more of your money stays invested, less goes to fees.
Conclusion: Transparency Wins
The right wealth manager is not only about performance or brand. It is about how much of your wealth you keep after all fees and hidden costs. Our calculator shows that in most cases, Independent Wealth Management is cheaper and more transparent.
👉 Try the tool with your own numbers, compare the totals, and see how much you could save. Over ten years, the difference can reach millions.
Disclaimer: This article is for informational purposes only. It does not represent financial advice. Please consult a licensed professional before making investment decisions.
