Practice of fund rebates ended in 2012 but claimants have been slow to act
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First published in FT
Time is running out for investors to reclaim up to SFr15bn ($15.4bn) in investment fund commissions that was pocketed by Swiss banks.
Swiss lenders historically received lucrative commissions from asset managers, whose products they pushed to their wealth management clients.
These rebates, which were as high as 2 per cent of assets in some cases, generated SFr4.2bn for banks in 2012, equivalent to 12.4 per cent of the sector’s profits, according to analysis by consultancy Finalix of data provided by the Swiss Bankers Association.
The practice came to an end in 2012 when Switzerland’s highest court banned banks from retaining commissions.
The ruling was significant for Switzerland’s largest banks, including UBS, Credit Suisse and Julius Baer, as it applied to commissions paid by a lender’s in-house asset management unit to its wealth division.
The Federal Supreme Court ruled that such commissions belong to the end investor and can be claimed back, yet few claims have been submitted and investors are running out of time, according to litigation experts.
Nicolas Ollivier, counsel at law firm Lalive, which specialises in banking litigation, said: “After the ruling of 2012, the financial industry expected a wave of requests from clients claiming back retrocessions [but] few clients asked for reimbursement.”
He added that claims tended to be made only when mismanagement disputes arose between investors and their banks.
“There are still huge amounts unclaimed,” he said….