What Swiss banks genuinely do well
Swiss banks are highly regulated, financially stable, and excellent at the core banking functions: holding deposits safely, facilitating payments, providing mortgages, and managing currency exchange efficiently. For the operational functions of daily banking including receiving your salary, paying bills, and transferring money, a major Swiss bank works well. The cantonal banks in particular offer a useful combination of local presence and competitive savings rates.
What Swiss banks do poorly and why
Investment advice is where the bank relationship often starts working against the client's interests. Swiss bank investment departments operate within a product distribution model: they recommend the products their institution manages or distributes, for which they receive ongoing fees. Index ETFs, which are demonstrably better for most retail investors, generate almost no fee income for the bank and are rarely recommended unprompted.
How to have the conversation with your bank advisor
When a bank advisor recommends a product, ask three questions before agreeing to anything. First: what is the total annual cost of this product including all fees and embedded costs? Second: what benchmark does this product aim to beat, and what is its 10-year track record net of fees against that benchmark? Third: what does the advisor or the bank earn from this recommendation? In Switzerland, advisors are legally required to disclose retrocessions upon request.
When leaving your bank is the right answer
Leaving a major Swiss bank for a neobank or specialist provider makes sense when your investment assets are managed through bank-recommended products with fees above 0.8 percent per year, you are paying monthly account maintenance fees above CHF 10 per month for basic services, or you are converting currencies regularly and absorbing 1 to 2 percent bank spreads. Keep the bank for the mortgage relationship if relevant. Move everything else where it serves you best.