A word to the wise from 15 years of bad experience: unless you are a multimillionaire investor, Credit Suisse will hook you with promises and slick brochures, then take your money, whittle it away with their annual fees, and forget you. We invested with them over 10 years (funds) and were consistently ignored, misled, ill advised, and even lied to. Our so-called "advisor" never got back in touch with us, changed on a regular basis, and in the end lost us well into the 5 figures, not counting their continual "fees".
UBS is even worse. In today's economy, I advise all "small investors" to go with kantonal banks, Migrosbank, or Postfinance. The big banks are not interested in you...only in taking your money.

You put up with that for 10 years ???

Plus both banks are disclosing private banking information of Americans to the US.

Yes, with the repeated mantra "invest for the long term"...as they discretely took their annual fees with a smile. Biggest financial mistake I ever made.

Oh...I am still considering their third pillar 3a fund which promises 2,125% interest which is better than 2% of Postfinance....guess yours is more investment type fund?

Simple rule... never give them 'discretion'. Use them only for execution.

Banks live off the fees they charge you. There's nothing else in it for them.

Sounds like ZKB funds. It seems most banks funds have preformed miserably in the last 10 to 15 years. There have been gains but financial crisis after financial crisis has destroyed any gains...

that is true, but the problem I have is with their business model.
if they are going to take a % of your assets - in good years and bad - then what incentive is there for them to help you make higher returns?? None whatsoever.

I am now in Financial services (after 18 years in Industry), and everything I see confirms what I always suspected. No one knows much more than what I hear in the news...

Apart from the obvious of management fees, the other problem is that managed funds need to be run by a set of rules and guidelines. They must have these rules in order to fulfill the many types of risk/reward scenarios that exist in the investing environment. That means that if a funds rules say that 50% must be in international shares and 50% in bonds for example, then whatever happens to those two asset classes, the fund must stay that way. It can change within those asset classes, but that's it. To follow a business cycle people would have to swap and change funds which can get expensive and adds a lot more risk.

It is this inflexibility that is a huge weak point of funds and why I would never use one. During a bull market as we experienced in the past (prior to June 07) this weak point doesn't materialise because everyone makes money, but during a volatile market this weakness comes to surface. Add on top of this a management and entry and exit fee and there goes a nice chunk of any money that may have been made on top of the principle.

Index funds are probably a better bet if someone must invest in that way - you take out a lot of the management fees and you keep all the upside which is different to the managed funds, you can also enter and exit cheaply and instantly. Managed funds under-performance has been researched extensively in the past decades, so im sure you will find a lot of info on the internet.

For myself for example, I dont look at many of the markets moving according to any business cycle as may have been the case in the past. The amount of government intervention is historically unprecedented, so people must invest accordingly. As the smart guys keep saying, capital preservation is what people should be aiming for at this stage.

This is just my 2 reps by the way so DYOR.

If you don't want to pay fees, invest in ETFs on a regular basis (e.g. monthly or quarterly). Then you minimise fees and benefit from franc/dollar/pound cost averaging. You will not suffer by buying at the top of the market. Also, you can liquidate positions quickly - although you should be investing for the long term (As your adviser says, although you do not want to handicap yourself with fees). The reason to invest for the long term is that equities pay higher than bonds pay higher than cash over longer periods and so on.

You can undertake a mechanical rebalance if you want say 50% equities / 40% bonds/ 10% commodities. There is a sensible philosophy behind this - diversification = and this is your simple get the average market return. Do not expect to beat the market, but you should build up a decent pile without having paid the fees e.g. large cap equities have historically averaged 6% annualised over the rate of cash - doesn't sound a lot but it is when compounded.

Unfortunately, if you go to a bank (or any financial intermediary) and buy their product, you pay the fees. If they perform well, you both do well (alignment of interests...). If they perform badly, you definitely lose, they get the reduced performance fees and lose the management fees if you walk away. But then you will pay for early redemption. (non alignment of interests).

I work in the finance sector and they might as well market the product 'You want fees with that?'. I don't buy products from intermediaries, but I have studied this stuff for a long time. Funny enough some people think they know what they are talking about, but I doubt they really do.

If you want to do some proper reading on the subject, start with Benjamin Graham's 'The Intelligent Investor' and go from there. He was the guy that taught Warren Buffett.

Ok, just rattled that off the top of my head and there is plenty that could be said on this subject but you get the gist and it's past my bedtime. Do it yourself - the world of finance is full of people looking for a cut.

Quick summary - Invest directly in equities / bonds and save the fees charged by the middleman.

My experience entirely (and I can lose myself money just as efficiently as Credit Suisse Funds).

or just avoid investing in shares right now

yes, or the thousands of ETF's that exist around the world tracking indices, commodities etc. There are a lot of options out there nowadays for the average investor its all just a matter of risk/reward for the individual.

Or buy assets when they are cheap & unloved rather like gold 10 years ago.

Individual bonds & equities = idiosyncratic risk = risk of blowup. Think Enron as a worst case scenario. You have to know what to look for or buy around 30 to diversify that individual risk to get only market risk... which is why you should buy the market ETF and get it at one price.

Do not try to time the market or buy on the cheap unless you really know what you are doing.

Again I refer you to the Graham book as a starting point. There is lots to read after, but this is the starting point for investing. Trading is an altogether different activity and you need to be focused on the market to profit, which is almost impossible to do unless you do it for a day job.

3rd pillar is different.