Private Banking Fees: Uncover Hidden Costs Across Banks

A family with assets at four private banks receives four tariffs, four sets of statements and, from the banks booked in the EU, up to four annual costs and charges reports. Each shows its private banking fees in its own format, currency and period. Nobody adds them up. The Geneva bank sends no MiFID II report, because Switzerland is outside MiFID II. The lombard loan sits in a separate credit agreement. This guide sets out a method to put every cost layer from every bank into one comparable table. A retrocession is a fee a product provider pays back to the bank that placed you in its product; our entry on retrocession fees covers the rules. PWA does not manage money, hold mandates, take commissions or give regulated investment, tax or legal advice.

How can I uncover hidden private banking fees, retrocessions, and investment costs across multiple banks?

To uncover private banking fees across banks, request each bank’s annual MiFID II costs and charges report or, from Swiss banks, the third-party compensation received (FinSA Art. 26). Add what no report shows: lending spreads, interest forgone on idle cash, banks that send nothing. Restate each total in euros and as a percentage of average assets, in one table.

The method, in the order of the sections below:

1. Map the layers. Nine cost layers plus idle cash.
2. Match each layer to its document. EU, Swiss and UAE rules differ.
3. Collect the documents in writing from every bank, for the same twelve months.
4. Normalise and complete. One currency, one period, one denominator; add what no report covers.
5. Compare banks side by side and against what each contract says you agreed to pay.

The nine layers of private banking fees

Private banking fees are not one charge. Annex II of Commission Delegated Regulation (EU) 2017/565 already lists the components, among them custodian fees, management and advisory fees, broker commissions, mark-ups, foreign exchange costs, structuring and distribution fees, financing costs and performance fees. It splits them into the cost of the service (what the bank charges) and the cost of the product (what is charged inside the funds and notes you hold). We group them into nine layers, plus a tenth that is not a fee at all.

Layers 1 to 4 are charged by the bank and mostly visible. Layers 5 to 8 are charged inside products and visible only in product documents or the annual report. Layer 9 lives in a different contract. Layer 10 lives nowhere, which is why families with wealth spread across multiple banks tend to find it last.

Private bank custody fees

Custody is the work of a custodian, the firm that holds your securities and cash: safekeeping, settlement, income collection, corporate actions. MiFID II lists it as an ancillary service (Annex I, Section B(1)), and Annex II of Regulation 2017/565 names custodian fees among the ongoing costs of the service. The tariff sets the base: a percentage of the account’s value, a charge per position, an annual minimum, or a mix. Two banks with the same headline rate can bill the same portfolio very differently if only one charges per position.

Fund retrocession fees

A fund retrocession is a share of the fund’s management fee that the fund house passes to the bank that placed you in it. It comes out of the ongoing charges in layer 5, so it never appears on your statement as a debit. The retrocession fees entry covers which services let the bank keep it. For the comparison, two facts matter: EU annual reports must itemise third-party payments separately, and a retrocession is part of the fund’s cost, so adding it again double-counts it.

Where each cost is disclosed, and where it is not

EU banks: the MiFID II costs and charges reports

MiFID II (Directive 2014/65/EU) requires an investment firm to inform clients of all costs and charges, including the service, the financial instrument and any third-party payments, aggregated so the client sees the overall cost and its cumulative effect on return, itemised on request, and at least annually where applicable (Art. 24(4)). Delegated Regulation 2017/565, Article 50, adds the detail:

• Art. 50(2): service and product costs aggregated; third-party payments received by the firm itemised separately; the total shown in cash and as a percentage.
• Art. 50(3): for costs in a foreign currency, the currency, the conversion rates and the conversion costs.
• Art. 50(9): an annual ex-post statement for clients with an ongoing relationship, personalised and based on costs actually incurred.
• Art. 50(10): an illustration of the cumulative effect of costs on return.

That makes the annual ex-post report the anchor document for every EU bank in the comparison.

Two limits matter for wealthy families. Many are classified as professional clients, by size or on request. Since Directive (EU) 2021/338, the costs and charges information in Art. 24(4)(c) no longer applies to services for professional clients, except investment advice and portfolio management (MiFID II Art. 29a(1)); eligible counterparties are outside Art. 24 altogether. A professional client with an execution-only account may receive no annual cost report at all. And the report covers investment and ancillary services: it is not built to show what the bank earns on your credit lines or your cash.

Quality varies too. Reviewing the 2019 ex-post statements of 20 credit institutions and 11 investment firms, Spain’s CNMV found that 13 credit institutions and 2 investment firms had left some implicit costs out, and 9 credit institutions and 3 investment firms had not totalled product costs, service costs and incentives separately. The CNMV expects the statement by 31 March of the following year, although the rule sets no deadline.

Products: the PRIIPs KID and the fund KID

Product costs are disclosed by the manufacturer, not the bank. Structured products and insurance-based investments carry a PRIIPs key information document (KID). Since Delegated Regulation (EU) 2021/2268, applied from 1 July 2022, the KID has two cost tables, “Costs over time” and “Composition of costs”. The second separates one-off costs (entry, exit), recurring costs (portfolio transaction costs apart from other recurring costs) and incidental costs (performance fees, carried interest).

For a structured product, the margin sits in the entry costs. ESMA finds structured retail product costs are “largely charged in the form of subscription fees”, and fewer than 3% of products carry recurring costs. A front-loaded cost averaged over the recommended holding period looks small per year; on a note sold after one year it does not. For funds, record the share class, not just the fund name: two banks can hold different share classes of the same fund at different costs.

Swiss banks: FinSA and the retrocession rulings

Switzerland is outside MiFID II. Since 1 January 2020, the Financial Services Act (FinSA, FIDLEG in German) allows a provider to accept third-party compensation only if it informed the client expressly in advance and the client waived it, or if it passes the compensation on in full (Art. 26(1)). The prior information must state the type and scope of the compensation; where the amount cannot be determined in advance, the calculation parameters and ranges. On request, the provider must disclose the amounts effectively received (Art. 26(2)).

Before FinSA, the Federal Supreme Court built the same principle on the Code of Obligations. In BGE 132 III 460 (22 March 2006), it held that retrocessions received by an asset manager must be handed over to the client (Art. 400(1) CO), unless a fully informed client clearly agreed otherwise. In BGE 138 III 755 (4A_127/2012, 30 October 2012), it applied that duty to the distribution fees a bank receives as asset manager on funds and structured products, including its own group’s products. In BGE 143 III 348 (4A_508/2016, 16 June 2017), it held that the claim prescribes after ten years, running separately for each retrocession from the day the bank received it.

Do not expect an EU-style annual ex-post statement from a Swiss bank. Ask in writing for the third-party compensation received on your account, per year and per product, and for a copy of any waiver you signed. Whether the waiver was valid is a legal question; the amounts are a fact the bank must give on request.

UAE, DIFC and ADGM banks

Disclosure regimes differ by booking centre. An account opened through a relationship manager in Dubai may be booked in the DIFC (DFSA), in ADGM (FSRA), onshore (Central Bank of the UAE, and the Securities and Commodities Authority for securities business), or in Geneva, Luxembourg or London. Each regime has its own conduct rules on fees and commissions; none is MiFID II, and we do not summarise them here. Ask the bank in writing which legal entity holds the account, which regulator supervises it, and whether it will provide an annual statement of all costs and of any third-party payments received.

What no report shows

• Other banks. Each report covers one firm. The total exists only if someone builds it.
• Lending spreads. MiFID II treats credit as an ancillary service only where it is granted to carry out a transaction in financial instruments and the lender is involved in that transaction (Annex I, Section B(2)). A lombard line used for property, a business or liquidity falls outside that definition. Read the interest in the loan statements.
• Cash drag. Interest not paid on idle balances is not a charge, so no report lists it. After a liquidity event, such as the sale of a business, it can be the largest layer at one bank.
• The FX detail. ESMA’s Q&A of 13 December 2023 puts conversion costs in the aggregated ex-post figures, but does not expect currencies, rates or conversion costs to be shown there unless you request the itemised breakdown. Ask which reference rate the bank measures its conversion cost against.

A step-by-step method to compare private bank fees across multiple banks

Step 1: inventory every account and entity

List every bank, booking centre, account, account holder (individual, company, trust, foundation) and service: execution-only, advisory, discretionary mandate (the bank decides within agreed written limits), credit. Add your client classification at each bank, retail or professional, because it decides what cost information you are owed. If the family already has consolidated reporting across multiple banks, the inventory exists. Each custodian on the list receives the same request.

Step 2: request the same documents from every bank, in writing

From every bank, for the same twelve months (ideally the last calendar year): the tariff in force, the signed mandate, advisory or custody agreement with any fee side letter, credit agreements and interest statements, the log of FX conversions with the rate applied and the time, and month-end valuations and cash balances by currency. Then the documents that differ by jurisdiction:

Send the request by email, from the account holder or with a signed authority, and file each reply with the document it refers to.

Step 3: normalise to one currency, one period, one denominator

• One currency. Convert at one documented source for the whole exercise, such as the ECB euro reference rates.
• One period. The same twelve months at every bank, never one bank’s calendar year against another’s mandate year.
• Average assets as the denominator. The mean of month-end values at each bank. A year-end value understates the rate for a portfolio that grew during the year.
• Cash and basis points. Every layer as a cash amount and in basis points of average assets (cost ÷ average assets × 10,000).

Then sort each line by who received it: paid to the bank (layers 1 to 4 and 9), paid inside products (5, 7, 8), paid by product providers back to the bank (6).

Step 4: add the layers no report covers

• Lending spread. The margin over the reference rate, times the average amount drawn, plus arrangement and non-use fees.
• Cash drag. The gap between a reference money-market rate in each currency and the rate paid, times the average balance. Label it as interest forgone, not as a fee.
• FX gap. For each conversion, the difference between the rate applied and a reference rate at the time, times the amount. If the report already includes conversion costs, reconcile the two rather than adding both.

Step 5: build the private banking fees comparison

One table: layers down the side, banks across the top, cash and basis points in every cell. The structure below is a template, not a benchmark.

Read it two ways. Across a row: the same layer at different banks. Down a column: the gap between the agreed rate and the all-in cost at one bank. Where a discretionary mandate has an agreed fee well below its all-in cost, the difference usually sits in product costs, in-house funds or a credit line. The table does not say whether a figure is too high for your situation. It shows what each bank costs on the same basis, so the decision is informed.

Ten questions to send each private banker

The glossary entry has three questions on third-party payments; these ten cover the other layers. Send the same ten to every bank.

1. Which client category are we in, retail or professional, and does that change the cost information you send us?
2. What custody fee do you charge, on what base (account value, per position, annual minimum), and is it debited or invoiced?
3. Which transaction tariff applies, including third-party broker and market fees, and do you apply a mark-up to bond trades?
4. What margin over the market rate do you apply to our currency conversions, by size band, and against which reference rate does your annual report measure conversion costs?
5. For each fund we hold, which share class is it and what ongoing charges does its KID show?
6. For each structured product bought this year, what entry costs did the KID show, and was the issuer part of your group?
7. Which holdings are your own group’s products, and what share of our assets do they represent?
8. How is each performance fee calculated: hurdle, high-water mark, crystallisation frequency?
9. For each credit line, what are the reference rate, the margin and any arrangement or non-use fee?
10. What interest do you pay on cash in each currency, from what threshold, and how is the rate set?

What private banking costs once every layer is added

There is no reliable, published all-in cost figure for private banking. Banks publish tariffs, not outcomes. The vendor ranges that circulate online give no source, so we do not repeat them. That absence is the point of the method: the only all-in figure that applies to you is the one built from your own documents.

How much private banks charge: what the public data shows

Regulator data exists for the product layers. ESMA’s market report “Costs and performance of EU retail investment products 2025”, published on 3 March 2026, covers UCITS, retail alternative investment funds and structured retail products to the end of 2024.

Ongoing costs are falling slowly: between 2020 and 2024, about 8% for retail equity funds and almost 15% for bond funds, mainly because newer funds are cheaper. Passive funds cost roughly 60–80% less than active funds. Including the maximum entry and exit fees disclosed in KIDs, ESMA puts five-year total costs at 1.9% a year for equity funds, 1.3% for bond funds and 2.0% for mixed funds, against 0.5% for equity ETFs.

These figures cover layers 5 to 8 only, before any custody, advisory or mandate fee, and before lending, FX and cash. The 48% figure explains why layer 6 matters: almost half of what a UCITS investor pays goes to distribution, which is where retrocessions come from. How a mandate or advisory fee charged as a percentage of assets compares with a fixed fee is set out in flat fee vs AUM wealth advisor.

Where the rules are heading

The EU Retail Investment Strategy was provisionally agreed by the Council and the European Parliament on 18 December 2025. It adds a best-interest test for inducements, cost quantification, value-for-money expectations and standard cost terminology. On 19 October 2026 it is not yet law: Coreper confirmed the agreement on 8 June 2026, the plenary vote is listed for 11 November 2026 as an indicative date, and no act has been published in the Official Journal. A&O Shearman reads the provisional text as applying the MiFID II changes 30 months after publication; the reports families receive today follow the current rules. In Portugal, according to a Cuatrecasas summary, CMVM Circular 001/2025 already expects intermediaries to ensure that costs and charges do not compromise the expected return of the instruments they produce and distribute.

When a fee comparison is worth doing

A comparison repays the effort when one or more of these is true:

• Assets sit at three or more banks, or in more than one booking centre.
• The portfolio holds structured products or the bank’s in-house funds.
• There is a lombard loan or another credit line at one of the banks.
• A bank books in Switzerland or the UAE, where the EU annual report does not apply.
• Mandates have been renewed for years without renegotiating the fee.
• A liquidity event has left a large cash balance waiting for a decision.

It is rarely worth it for one bank, an execution-only account or a portfolio of ETFs: the annual report already says most of what there is to know.

Three parties can do the work. The family can, with a spreadsheet, if someone owns it. The accountant can collect figures but is rarely asked to challenge how a bank classifies its own costs. An independent party can, provided it is paid by the family, and only by the family, and takes no retrocession itself; otherwise the comparison carries the conflict it is meant to expose. Under Investment & Wealth Architecture, we coordinate the review of managers, mandates and fees across banks. Under Administration & Back Office, we keep the cost table current as each year’s reports arrive. If a bank has offered a free portfolio review instead, our note on a free portfolio review versus a second opinion explains the difference in incentives.

The fastest first step is a Wealth Operations Review, which includes the cost table across your banks.

Questions we hear

How much does private banking cost?

There is no reliable published all-in figure for private banking. The closest public data is ESMA’s 2025 report: in 2024, retail equity UCITS charged 1.32% a year in ongoing costs and bond UCITS 0.81%, before any bank custody, advisory or mandate fee. Your own bank’s annual costs and charges report is the only figure that applies to you.

What are private bank custody fees?

A custody fee is what the bank charges to hold and administer your securities: safekeeping, corporate actions, income collection. It is often a percentage of the account’s value, sometimes with a minimum or a per-position charge; the tariff says which. For EU retail clients it is a service cost that the annual costs and charges report must include.

Are retrocession fees still allowed under MiFID II?

It depends on the service. Under independent advice and discretionary portfolio management, the bank may not accept and retain third-party payments (MiFID II Art. 24(7)(b) and 24(8)). For other services, including non-independent advice, it may, if the payment is designed to enhance the service, does not impair your best interest and is disclosed beforehand (Art. 24(9)).

Can I claim back retrocessions from a Swiss bank?

Under Swiss case law, a client whose bank manages their assets is entitled to the retrocessions it received (Code of Obligations Art. 400(1)), unless the client validly waived them after full information. Each payment becomes time-barred ten years after receipt (BGE 143 III 348, 2017). Whether a claim exists is for a Swiss lawyer to assess.

Does the annual costs and charges report include FX spreads and structured-product margins?

It should include both, aggregated. ESMA’s Q&A of 13 December 2023 says currency conversion costs belong in the annual ex-post totals, with currencies and rates shown only in the itemised breakdown you can request. Structuring and distribution fees embedded in a product are product costs under Delegated Regulation 2017/565, Annex II. Ask for the breakdown to see them.

How do I compare private banking fees across several banks?

Collect from each bank the tariff, the contract, the annual costs and charges report and the list of third-party payments. Restate every cost in one currency, for the same twelve months, as a cash amount and as basis points of average assets. Add what no report shows, such as lending spreads and idle cash, then compare in one table.

Sources

All pages opened and checked on 19 October 2026.

• European Parliament and Council, Directive 2014/65/EU (MiFID II), Article 24, 15 May 2014. Supports: costs and charges aggregated, itemised on request, at least annually, including third-party payments (Art. 24(4), 24(4)(c)); no third-party payments retained for independent advice and portfolio management (Art. 24(7)(b), 24(8)); conditions for other services (Art. 24(9)). eur-lex.europa.eu; text read on legislation.gov.uk (EU version)
• Directive 2014/65/EU, Annex I, Section B. Supports: safekeeping (B(1)) and credit to carry out a transaction in financial instruments (B(2)) as ancillary services. legislation.gov.uk
• European Parliament and Council, Directive (EU) 2021/338, 16 February 2021. Supports: Art. 24(4)(c) not applying to professional clients except investment advice and portfolio management (Art. 29a(1)); eligible counterparties outside Art. 24 (Art. 30(1)). eur-lex.europa.eu
• European Commission, Delegated Regulation (EU) 2017/565, Article 50 and Annex II, 25 April 2016. Supports: Art. 50(2), (3), (9) and (10) as summarised above; the cost items in Annex II, Tables 1 and 2. eur-lex.europa.eu; text read on legislation.gov.uk, Art. 50 and Annex II
• ESMA, Q&A on MiFID II and MiFIR investor protection topics, Q&A ID 2025, “Disclosure of costs and charges paid in or represented in an amount of foreign currency”, 13 December 2023. Supports: conversion costs in aggregated ex-post figures; currencies and rates only in the itemised breakdown. esma.europa.eu
• European Commission, Delegated Regulation (EU) 2021/2268, 6 September 2021, applying from 1 July 2022. Supports: KID tables “Costs over time” and “Composition of costs”; one-off, recurring and incidental costs. eur-lex.europa.eu
• ESMA, “Costs and performance of EU retail investment products 2025” (ESMA50-1949966494-4065), 3 March 2026. Supports: 2024 ongoing costs of 1.32%, 0.81% and 1.44%; falls of about 8% and almost 15% over 2020–2024; passive 60–80% cheaper than active; five-year total costs of 1.9%, 1.3%, 2.0% and 0.5%; distribution at 48% of UCITS total costs; structured retail products median cost of 0.8% a year, largely subscription fees, fewer than 3% with recurring costs. Report PDF · press release
• Swiss Confederation, Financial Services Act (FinSA, SR 950.1), Article 26. Supports: conditions for accepting third-party compensation; prior information; calculation parameters and ranges; amounts received on request. fedlex.admin.ch; English text read on droit-bilingue.ch
• FINMA, news release, 7 February 2020. Supports: FinSA and FinIA in force since 1 January 2020. finma.ch
• Swiss Federal Supreme Court, BGE 132 III 460 (4C.432/2005), 22 March 2006. Supports: handover of retrocessions under Art. 400(1) CO; waiver only by clear agreement of an informed client. bger.ch (text consulted via servat.unibe.ch)
• Swiss Federal Supreme Court, BGE 138 III 755 (4A_127/2012), 30 October 2012. Supports: handover of distribution fees received by a bank as asset manager, including on group products. bger.ch (text consulted via servat.unibe.ch)
• Swiss Federal Supreme Court, BGE 143 III 348 (4A_508/2016), 16 June 2017. Supports: ten-year limitation (Art. 127 CO) for each retrocession from the day received. bger.ch (text consulted via servat.unibe.ch)
• CNMV, Informe anual sobre los mercados de valores y su actuación 2020, pp. 207–209, 2021. Supports: review of 2019 ex-post statements at 20 credit institutions and 11 investment firms; 13 and 2 omitted implicit costs; 9 and 3 did not total product, service and incentive costs separately; 31 March expectation. cnmv.es
• Cuatrecasas, “CMVM strengthens financial instruments value-for-money rules”, 24 March 2025. Law-firm summary, not an official text. Supports: CMVM Circular 001/2025 on costs not compromising expected profitability. cuatrecasas.com
• A&O Shearman, “Council of EU and EP reach provisional agreement on proposed retail investment strategy package”, 18 December 2025. Law-firm summary, not an official text. Supports: agreement date; best-interest test for inducements; quantifying costs; value for money; application 30 months after publication. finreg.aoshearman.com
• European Commission, “Commission welcomes agreement on the Retail Investment Strategy” (IP/25/3125), December 2025. Supports: transparency where inducements are allowed; standard terminology for costs; value for money; formal adoption pending. europa.eu
• European Parliament, Legislative Observatory, procedure 2023/0167(COD). Supports: Coreper confirmation of the agreement on 8 June 2026, indicative plenary date of 11 November 2026, no act published in the Official Journal as of 19 October 2026. oeil.europarl.europa.eu

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Pedro Souto is the founder of PWA — Private Wealth Advisory. He works with UHNW founders, families, and single-family offices to build an independent operating layer around complex wealth — combining markets, analytics, technology, and governance to turn fragmented advice into one coherent picture, and to make someone, finally, responsible for the whole of it.