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Old 27.07.2020, 10:51
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Platforms & Investing for Retirement

Hi,

Pleased to meet you all! What a fantastic resource this is! I am trying to do as much preparation in advance of taking up new employment in CH in a few weeks, and the EFS forum has been a great help. And my apologies if I ask too many Newbie questions...

My questions centre around investing for retirement.

Have been investing for many years using SIPPs and ISAs in the UK through the likes of HL and AJB using a Buy-and-Hold strategy, primarily in funds (mutuals/OEICS) and ETFs, and am looking to do the same in CH.

Pillars 1&2 sorted via employer
Pillar 3a the consensus appears to be (in order) VIAC, Frankly, PostFinance
Q1: Any others worth considering?

Pillar 3b appears to have no advantage unless you want insurance, which I don't
Q2: Are there any other investment opportunities via 3b? Any tax advantages that I may have overlooked?

So anything north of the CHF 6826 (in 3a) I plan to invest via a platform.
InteractiveBrokers appears to be a popular choice on the forum, and the CHF10 pm low volume fee does not appears to be expensive (from a UK perspective anyway)
Q3: Any other platforms that I should be considering that might suit my circumstances?

Q4: For registration, should I use a UK or CH address? I'm thinking in terms of ease of keeping on the right side of the Swiss tax authorities, eg reporting, automated payment of withholding tax, etc. Also in terms of Q5

Q5: What sort of investor protection is there (or should I be looking out for, whether this be for InteractiveBrokers or any other platform? e.g. in the UK it would be registration and regulation by the Financial Conduct Authority, ring-fencing of investor's funds/separate registration of ownership.

Many thanks in advance for your help!
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Old 27.07.2020, 14:07
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Re: Platforms & Investing for Retirement

1) I haven't heard about any others with comparable fees. The only caveat I've found with VIAC is that they adjust their interest on cash down quicker than other options. But I guess whether you get 0.1% or 0.2% is negligible ...
I'm happy with VIAC so far.

2) No clue.

3) I'm also using InteractiveBrokers and I like it a lot. I also, rarely, use Swissquote when I want to trade in Switzerland, so far it seems to be 16CHF (+ MwSt.) per quarter when you held anything other than cash and free if you didn't.

4) I would use the address where you currently reside. I don't think it matters much though.

5) At least for my account the UK investor protection applies, even though I'm in Switzerland, because InteractiveBrokers is not. (To my knowledge they have a branch office in Switzerland, but that may very well be outdated information). Shares etc. that you own are yours even if InteractiveBrokers would go bust, regarding cash in your account I'm not sure but would assume a "low" amount is insured, e.g. 100k.
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Old 27.07.2020, 22:04
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Re: Platforms & Investing for Retirement

Thank you Rollercoaster
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Old 28.07.2020, 06:46
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Re: Platforms & Investing for Retirement

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Thank you Rollercoaster
I never bothered with any 'Swiss' products, historically returns were poor & charges high. The worst investment I ever did was buy all my back pillar 2 years.

I invested in US markets with Schwab & UK via HL
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Old 28.07.2020, 22:07
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Re: Platforms & Investing for Retirement

Does anyone else have any further responses to the 5 questions listed above please?
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Old 29.07.2020, 14:20
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Re: Platforms & Investing for Retirement

Q1 - Depending on age and how much you will invest, you may want to look at spliting the 3a, so its not all in one place. Tax reasons and there are some others. If you plan to be here only a few years or the maximum amount you can put away into it isnt so great its not really an issue.

Q2 - 3B, I have one and kind of regret it. I am told there are tax benefits in Geneva and Fribourg, but would really check that out if true. Its an insurance and ok, it forces me to put something in there but if I was more clued up back then I probably wouldnt have done it.

Q2 part B - You can also invest it back in your company pension. There are tax advantages. Contact the company pension scheme and see how much you can pay in. To do this is a bit of a science as you will want to put in enough to bring down a tax threshold, but you would need to know where these thresholds are.

Q3 - I have just joined Yova. Ethical investing. Go to an open evening and see what they have to say, its interesting I think.

Q4 - Do whats legal. If you live in CH register in CH, really that simple.

Q5 - FINMA is the Swiss finance authority
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Old 29.07.2020, 15:59
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Re: Platforms & Investing for Retirement

Thank you Peaky
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Old 31.07.2020, 11:13
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Re: Platforms & Investing for Retirement

When I arrived in Switzerland I found this to be a good blog + forum about investing in Switzerland

https://www.mustachianpost.com/

You'll probably find a ton of threads on Fundsmith... that's been my best investment decision ... but I still like reading all threads for fun
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Old 31.07.2020, 11:26
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Re: Platforms & Investing for Retirement

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Pillar 3b appears to have no advantage unless you want insurance, which I don't
Q2: Are there any other investment opportunities via 3b? Any tax advantages that I may have overlooked?
Pillar 3 in general is all your non pillar 1 and non pillar 2 retirement plans and savings. What ever they might be.

Pillar 3a has tax preference.
Pillar 3b is all the rest which usually has no no tax preference.

Pillar 3b includes your stock portfolio, your collection of classic cars, your real estate, extra life insurances, the money stuffed in your mattress etc. which you intend to use for retirement.
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Old 31.07.2020, 13:37
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When I arrived in Switzerland I found this to be a good blog + forum about investing in Switzerland

https://www.mustachianpost.com/

You'll probably find a ton of threads on Fundsmith... that's been my best investment decision ... but I still like reading all threads for fun
Fundsmith has done brilliantly and is a great defensive fund fior when the going gets tough but for me Scottish Mortgage has been the star in recent years (especially over Covid) - 220% return over 5 years whereas fundsmith is about 150% iirc.

These days I'm putting more money into Scottish mortgage and also into bailie Gifford global discovery - more positioned towards developing companies which have a higher growth potential.

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I never bothered with any 'Swiss' products, historically returns were poor & charges high. The worst investment I ever did was buy all my back pillar 2 years.

I invested in US markets with Schwab & UK via HL
Pillar 3a with VIAC can be just about worth it if you max out the non-Swiss equities. I think it'll be at least competitive given the tax advantages, especially near retirement.

Last edited by 3Wishes; 02.08.2020 at 21:30. Reason: merging consecutive replies
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Old 31.07.2020, 17:17
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Re: Platforms & Investing for Retirement

Hello
Interesting posts

A naive question but if you are living in CH do investments in Fundsmith and/or Scottish Mortgage lose value as they are invested in Euros and/or Sterling both of which have fallen against the swiss franc?
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Old 31.07.2020, 20:21
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Re: Platforms & Investing for Retirement

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Hello
Interesting posts

A naive question but if you are living in CH do investments in Fundsmith and/or Scottish Mortgage lose value as they are invested in Euros and/or Sterling both of which have fallen against the swiss franc?
You are massively up in both cases, is just a valuation currency very little money is earned in the UK. These figures are a year out of date but I doubt source of revenue has changed enough to worry about.

You need to remember that only 2% of Nestle's profits come from CH, more are earned in India, so country of listing is often irrelevant to where earnings are derived.

Fundsmith
North America : 46%
Europe : 24%
Asia pacific : 19%
Eurasia, Middle East, Africa 6%
Latin America : 5%

Smithson
North America 39%
Europe including UK 36%
Asia Pacific 18%
Eurasia 2%
Latin America 2%
Cash 3%

Lindsell Train Global Equity
Japan 13%
Western Europe 26%
USA 33%
Emerging & Other 26%
Does not add up to 100% I assume cash yields Zero

As at 30 June 2020 fundsmith 5 year performance is + 91.42 in CHF & + 89.59 in Euros, they are up since then.

CHF is weaker v Euro on a 5 year view
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Old 31.07.2020, 20:44
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Re: Platforms & Investing for Retirement

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Hello
Interesting posts

A naive question but if you are living in CH do investments in Fundsmith and/or Scottish Mortgage lose value as they are invested in Euros and/or Sterling both of which have fallen against the swiss franc?
They are worldwide equity funds with little exposure to the UK economy. If the goes down you'll just have more .

Obviously if you bought a fund that invests in small uk companies then you'd be more exposed to the uk economy.
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