Hello Forum,

Just to make you aware that what some peddlers of financial products call 'the Swiss ISA' or more commonly known as a 3rd pillar account can sometimes be hidden in a horrible package involving a life insurance policy with your money tied up until the day you die, or at best until you retire.

We are talking about the mis guidance of selling of financial products here so please all beware. Its the big names you see in the big towns that have these awful products that in reality should not be even considered for any person who is not going to live and work in Switzerland for at least the next 10 years. i.e. expats who dont fully understand the Swiss tax and financial systems should not be approached. This does not stop the pay out chasing 'advisors' and 'agents' pushing these products onto you with very little information. Once you have signed, that’s it...the only person that will help you from that point is yourself...WATCH OUT!

The problem is the 3rd pillar money stays in Switzerland until you retire (like it would with an 3rd pillar account in CS or UBS) but the difference is you must pay the full 6300 CHF until you retire...not good!..Plus there is a HUGE portion of the money taken on outset by the salesman and insurance company that effectively means that until around year 10 its not even broken even and of course how many of us will be here and working and earning in Swiss francs at year 10? So what do you do….you enquire about closing it and then you start to cry at the realisation you have been sold and mis advised to take a product that is just not suitable for you.

Tell you colleagues, friends, people in the pub to watch out…

Some of the most well known names on the Swiss high street are out there selling these products, usually via a salesman so that when it comes to the crunch they can claim they were not present in the sales meeting.

Anyone else had this experience? Are we allowed to name and shame the companies selling these products here?

WATCH OUT!!!

...erm... you do know that the 3rd pillar can be withdrawn 1) to make mortgage payments and 2) when you leave the country, and 3) are perfectly valid means of reducing taxes for Swiss and expats alike?

...or is this a particular "investment package" that you are talking about?

(And no, usually you are not allowed to name and shame, due to fear of litigation. You might also find that your thread is merged with this one.)

3rd pilar comes in 2 forms: like a bank account or as life insurance.
The bank account costs nothing you get what you invested + the interest. Whereas the life insurance case one has to pay for the risk that is covering you. So what you get is what you invested - cost of insurance.

No I did not know that the the 3rd pillar can be used for mortgage payments. Im looking at the listing from Swiss Wife I received it does not say this.

I agree you can take the 3rd pillar out of Switzerland when you leave, but the the immense cost of the life insurance is deducted - so called surrender value. Plus minus from four years 3rd pillar ive paid in (25k) the surrender value - what ill get back, is around half this money!!...Was this made clear to me on outset? No, of course not. Do I need a life insurance policy in Switzerland, no of course not, did I intend to pay into a Swiss life insurance policy until im 65? No, of course not...

So thanks sir, but the objective of this post is to make people aware that these big companies posing as your mainstay of the Swiss high street have such products that they push using external parties (who are paid well to sell) and of course have huge penalties once you have signed up (well someone needs to pay the advisor and selling company).

However I will investigate about the mortgage payments, but I think like every other avenue ive tried to explore I will be told no and the money is tied into CH until I leave or im 65.

Ta.

Seems like an ideal spot to shamelessly plug my own thread
Financial Mis-selling to expats

I absolutely agree that you need to be aware of the difference between 'cash investment' pillar 3 products and insurance based pillar 3 products. The latter, like most 'complex' insurance related policies are great earners for the sellers, but are generally not good for relatively short term investment. If you hold for the long term and if the suppliers fees/charges etc are low and if the performance of the underlying investments are good, these can make some sense for some people. But you must be aware of the pitfalls. I would generally suggest non-insurance related products unless you really have done your homework.