What a portfolio review checks
A portfolio review is a stocktake of your securities from the investor's point of view. It answers three questions: what does my current solution really cost? Does the risk match my goals and my capacity to bear risk? Is the portfolio sensibly structured, or have overlaps and legacy positions piled up over the years?
Bank-independent means the review does not come from the bank that holds the account or sells the products in it. That matters because a bank rarely questions its own solution fundamentally.
- Costs: custody and management fees, fund product costs, transaction and currency costs
- Risk: equity share, concentration in stocks, sectors and currencies, fit with your risk profile
- Structure: number and overlap of funds, share of in-house products, tax efficiency
- Outcome: return after costs compared with a suitable benchmark
Who benefits
The greatest benefit goes to people with sizeable securities holdings that have sat with one bank for years, often under a discretionary mandate. One Swiss provider cites assets from around CHF 100'000 as a guideline; below that, potential savings are often small relative to the effort.
| Situation | Assessment | Why |
|---|---|---|
| Larger portfolio, unchanged for years | Well suited | Costs and structure have not been reviewed for a long time |
| Discretionary mandate with all-in fee | Well suited | Additional product costs are often not immediately visible |
| Wish for a neutral second opinion before a decision | Suitable | The review replaces gut feeling with figures |
| Small portfolio with a few low-cost index funds | Rarely necessary | Optimisation potential is usually low |
| Expectation of being sold products | Not suitable | An independent review is not product advice |
Where the costs hide
The fee on your statement is rarely the whole story. Many costs are deducted directly from fund assets and never appear as a separate charge. Since the Financial Services Act FinSA came into force, financial service providers must disclose their costs, but a complete picture often requires targeted questions.
| Cost type | Where it shows | What to watch |
|---|---|---|
| Custody and management fee | Fee statement, portfolio statement | Percentage, minimum fees, flat charges |
| Ongoing fund costs | Key information document, fund documents | Share of expensive in-house funds |
| Transaction costs | Contract notes for individual trades | Frequency of reallocations |
| Currency costs | Exchange rate on foreign currency purchases | Mark-ups on the FX rate |
| Retrocessions | Contract and cost statement | Whether they are passed on or you have waived them |
A worked example with assumed figures shows why a close look pays off: if a CHF 500'000 portfolio costs 1.5 percent a year in total instead of 0.8 percent, the difference is CHF 3'500 annually. Over ten years, including forgone returns on that amount, this adds up to well over CHF 35'000. What matters is therefore the total expense ratio, not any single fee.
Keep an eye on retrocessions
According to Federal Supreme Court case law, distribution fees a bank receives under a discretionary mandate belong in principle to the client, unless the client has waived them on an informed basis. Whether and to what extent claims exist should be clarified with a specialist in each case.
Process and documents needed
- Initial meeting: clarify goals, investment horizon, risk appetite and liquidity needs.
- Hand over documents: current portfolio statement, management or advisory agreement, fee schedule, transaction list for recent years, tax statement.
- Analysis: calculate costs, assess risk and structure, measure results against a suitable benchmark.
- Report: document findings in writing and traceably, with prioritised measures.
- Decision: you decide whether to negotiate with the bank, make adjustments or change nothing.
A solid review usually takes a few days to a few weeks, depending on portfolio complexity and how complete the documents are. One provider states five working days for its process.
Checking the provider's independence
A free review is not automatically neutral. The provider has to fund the work somehow, for example through a later mandate, an advisory fee or commissions. That is legitimate, but it should be disclosed openly.
- How is the provider paid, and does it receive commissions from product providers?
- As an asset manager, does it hold the required FINMA licence and belong to an ombudsman service?
- Will I receive a written report with traceable figures?
- Will I be told plainly if there is no relevant potential?
- Do I have to switch banks to achieve improvements, or is negotiating enough?
The value of a portfolio review lies in transparency, not in the promise of a higher return.