In his past life as a Swiss private banker, Marcel Chevrolet advised his clients to come clean on their taxes. He was fired for it. His experiences since leaving the industry are a guide for navigating the post-secrecy professional world. A finews.com interview.

Marcel Chevrolet, around five years ago you hit a wall after a long career in banking. What happened exactly?

I spent 25 years mainly taking care of German and Austrian clients. In the last period, over several years, I recommended that they take care of their tax situation by voluntary disclosure.

«Lost my job after leading clients into tax honesty»

 I was able to take many clients into tax honesty, with the result that their wealth was repatriated. That was how I lost my clients – and my revenue base – and was let go.

What happened then?

After nearly two years of unemployment with little perspective of a new job, I had two options: fall into the welfare system, or self-employment! I quickly found the path which I wanted to pursue.

Why?

I had a crucial experience: after 220 applications, I was invited to two interviews, including one at a bank in Olten.

«I was told I had too much drive, too many ideas»

Unfortunately neither were successful, and the reason I was given couldn't have been more absurd: I was told I had too much drive and too many ideas! Truly. That was the point where I told myself, «you have to start your own business.»

 What was the most difficult thing about this period?

To go to your pain barrier in terms of being humiliated. But after that crucial experience, the fog lifted and I had a much clearer view. From there, I began planning and rolling out my business.

«The constant exchange among friends helped with the considerable insecurity»

I really benefited from the information available through startups.ch for things like how to set up my own firm, what legal entity to choose, how to build it up and organize it all.

Could you give others any advice about coping with the uncertainty of self-employment?

The insecurity was considerable in that I didn't have an existing client base to build up my business around.

What helped me a lot was the constant exchange with friends, many bankers among them, but not only. It helped me find out whether I was pursuing the right path or needed to alter my strategy.

«The unemployment office is unequipped to deal with bankers»

What didn't help me at all was (Swiss unemployment office) RAV, which is more preoccupied with ticking boxes...The RAV was unequipped to deal with highly-qualified and experienced bankers.

I would recommend anyone in that situation to not hole up. Go out, talk about your situation, unpleasant as it is, and keep in touch with your friends, acquaintances and clients. 

How did you find the so-called unique selling proposition for your firm?

I asked myself three questions:

  • How can I add value?
  • How can I distinguish myself from the other 3,500 wealth managers in Switzerland?
  • What can I do better than others?

What did you find out?

I started with a cost analysis: I showed clients how unbelievably high the costs of wealth advisory and management are at banks, and compared them with my quite low costs. I won my first clients this way.

What happened next?

I didn't find my niche until later: advising clients with pension funds earning practically no interest and not invested. I realized that all occupational benefit foundations maintain their own pension funds, which they don't actively offer to their constituents.

«Enormous savings on occupational benefits»

The reason is obvious: despite negative interest rates, the foundations which run these accounts earn at least 1 percent more than they pay their account holders as interest.

This led to my specialty area today: optimizing the tax situation for foreigners who are leaving Switzerland for good. The issue is an enormous savings of roughly 50 percent of taxed at source when withdrawing pension funds and leaving Switzerland.

You've been self-employed for nearly three years. How is your business doing?

The first two years were difficult, but demand has picked up in the last six months. Business is now going well, which is the result of sticking with it and considerable work. I win most of my clients by word of mouth.

What sort of experiences with banks do prospective clients come to you with?

Generally speaking, clients have the same experience, no matter what bank they do business with: banks only care about revenue – their own! Banks aren't interested in whether clients earn money.

«Crammed full of expensive, opaque products»

Most portfolios are crammed with expensive proprietary funds or completely opaque structured products. Then there are currency transactions with at least 1 percent margin. I see accounts with costs of considerably more than 2 percent annually, with no revenue for the client.

Another example are custody accounts made up of 0.5 percent of Roche and Novartis stock each for a total of 2,500 Swiss francs, with commission of at least 150 francs.

«Banks don't care a whit about the client's interests

What I'm trying to say is that banks don't care a whit about the client's interests: The most minimal positions are maintained in order to stay below the minimum trading fee of 150 francs. The bank pockets the difference.

Funnily enough, many accounts hold the bank's proprietary funds or structured products as 4 percent or even 6 percent of assets. Of course, the bank earns at least 1.5 percent in concealed fees through these products.

What do you do differently?

I offer my clients a purely dividend-driven, buy-and-hold strategy on Swiss stocks, and they are all satisfied with the results.

  • The second part of finews.com's interview with Chevrolet, on the problems of banks, what smaller providers can do better, and the future of Swiss banking, will follow in coming days.

Marcel Chevrolet is a Swiss wealth manager who has been self-employed since May 2014, specialized in occupational pension benefits. Previously, he was a client advisor and member of management at various firms in Switzerland including UBS, Sarasin, BNP Paribas, EFG International und Commerzbank (Switzerland).