Costs associated with the Private Banking / Wealth Management service that you may encounter:
- Portfolio Management fee – individual Portfolio Management is normally paid according to the amount of funds and risk focus, in the Czech Republic it ranges between 0.3% -1.5% p.a. If the client is willing to share the portfolio performance with the manager, the Portfolio Management fee can be reduced.
- Fee for investment advisory – if the client does not want the bank to make decisions on specific investments, it can apply for an advisory contract. This is accounted for by amount in range between 0.2% -0.5% p.a.
- Custody fee – fee for holding securities in the registers and related services, the costs are in the range 0.05% -0.3% p.a.
- Transaction fee – mostly reduced fees for private banking clients
- Private Banking / Wealth Management fee – some Private Banking services have a Private Banking fee. It is not yet very widespread in the Czech Republic and is mostly applied to smaller assets that do not meet the bank’s requirement.
The issue of fees is very complicated and therefore it is necessary to address it at the beginning of the relationship with the bank and correctly set the fees.
An important factor for the client is the personality of the private banker. If a private banker is to be a confessor and a doctor through finance, there must be trust between you and banker. Do not shy to ask for a possible change of banker.
If you don’t understand something, ask for explanation – the banking language may seem incomprehensible.
Make a list of what you expect from a bank before agreeing with a bank.