No jargon inside the definitions
The words, explained.
Swiss pension and investment vocabulary is mostly German, mostly legal, and mostly unavoidable. Replacing it with something friendlier would make this site less useful, not more, so it is explained instead — here, and wherever it appears in the text.
- Custody
Who physically holds your investments and cash. Advice and custody are separate jobs: here you keep custody with your own broker and we never touch the account.
Where it comes up: Where your money sits- Drawdown
Taking money out of invested savings to live on, rather than adding to them. The order and timing of withdrawals matters as much as what is invested.
Where it comes up: Approaching retirement- FinIA
The Financial Institutions Act, FINIG in German. It decides which firms need a licence to manage or advise on other people’s money, and what supervision they sit under.
Where it comes up: Our regulatory standing- FINMA
The Swiss Financial Market Supervisory Authority. It licenses and supervises banks, insurers and asset managers, and it publishes a register anyone can search.
Where it comes up: Our regulatory standing- FinSA
The Financial Services Act, FIDLEG in German. It sets what a firm must tell you before advising you, how it must classify you as a client, and what it must disclose about its own conflicts.
Where it comes up: Important information- High-water mark
A rule some performance fees use: a fall has to be recovered before the fee applies again, so the same ground is never charged for twice. This firm applies one.
Where it comes up: The fee page- Hurdle
A minimum return a portfolio must clear before a performance fee applies at all. This firm does not use one.
Where it comes up: The fee page- Pension buy-in
Einkauf: paying extra into your pillar 2 to fill gaps from years you were not contributing. It reduces taxable income now and locks the money up until retirement.
Where it comes up: Retirement investing- Pillar 2
The occupational pension your employer runs. Contributions come out of your salary, and the pot is yours even if you change jobs.
Where it comes up: Expats in Switzerland- Pillar 3a
The voluntary private pension, called Säule 3a in German. You pay in yourself up to a yearly limit, deduct it from taxable income, and cannot touch it until close to retirement.
Where it comes up: Retirement investing- Quellensteuer
Tax at source. For many foreign residents in Switzerland, income tax is deducted from salary before it is paid, rather than settled once a year by return.
Where it comes up: Expats in Switzerland- Retrocession
A payment a fund or platform makes to an adviser for putting client money into it. Swiss law requires it to be disclosed, and it is the clearest test of whether advice is independent.
Where it comes up: Conflicts of interest- RSU
Restricted stock unit. A promise of company shares that becomes actual shares on a set date, provided you are still employed when that date arrives.
Where it comes up: Concentrated positions- Vested benefits
Freizügigkeitsleistung: the pension money left behind when you leave a job and do not immediately join another Swiss scheme. It sits in a holding account until it has somewhere to go.
Where it comes up: Leaving Switzerland
Anywhere one of these appears in the text on this site, the word carries a dotted underline. Hover it, or reach it with the keyboard, and the same definition opens in place.
Still not plain enough?
Ask on the first call. Half an hour, no charge, and no question about your own money is too basic to put to somebody you are considering paying.