How to Find the Right Trustee in Switzerland

Choosing the right trustee for your business is one of the most critical decisions you can make. In Switzerland, a “trustee” encompasses a broad range of essential roles and functions.

If you’re a business owner looking for someone to manage your company’s financial affairs and tax matters, finding a trustworthy and competent trustee is essential. This guide aims to help you sort through the maze of selecting a trustee, offering insights into what a trustee does, the challenges you may face, and how to ensure that your trustee is truly acting in your best interests.

Book a free initial consultation with our experts.

Book a call

Highlights

  • Trustees should always act in the best interests of the client and be transparent
  • The professional title of trustee is not legally protected in Switzerland
  • Missed deadlines and errors can lead to considerable legal consequences
  • Lack of regulation allows unqualified persons to act as trustees
  • Regular communication and appropriate fees are essential for a good fiduciary relationship

Content

  • How to Find the Right Trustee in Switzerland
  • Highlights & content
  • What is a trustee?
  • Why are there so many “bad apples”?
  • Is there such a thing as a “registered trustee” in Switzerland?
  • How do you know your trustee isn’t doing enough?
  • So, what next? Can you change your trustee?
  • What should you look for in your new trustee?
  • Do you need a reliable trustee partner in Switzerland?
  • FAQ

What is a trustee?

In Switzerland, the best translation of the German term “treuhander” is “trustee” or “fiduciary”. In this context, a trustee broadly refers to any legal entity (natural or legal person) who represents the interests of another legal entity (i.e., the client).

While this can take a wide range of forms (including anything from tax consultants to architects), the term is typically used to describe someone who supports and represents their clients in financial matters. This can include tax advisors, accountants, management consultants, financial advisors, auditors, and more. There are many trustee firms in Switzerland that fulfil a combination of some or all the above roles.

 Trustees have a “fiduciary duty” to their clients, meaning that they are contractually obligated to always act in the client’s best interests, avoid embezzlement or other unlawful acts, and disclose all documentation to the client at any time it is requested.  

Here you can easily calculate the costs of your accounting.

Price calculator

Why are there so many “bad apples”?

One of the challenges in finding a reliable trustee partner in Switzerland is the fact that the title “trustee” is not legally protected. This means that virtually anyone can call themselves a trustee, regardless of their qualifications, experience, or ethical standards.

The lack of regulation in this field has unfortunately resulted in many unqualified and unscrupulous individuals marketing themselves as trustee experts when they are, in fact, unequipped to handle the complex financial, legal, and business matters their clients entrust them with.

This creates the high risk of employing the “wrong” trustee, which can cause significant financial and reputational damage to your business. If your trustee provides subpar services, you are the one who suffers, not them. Wrong business decisions suggested by your trustee, failure to meet tax deadlines, and inefficient tax optimization strategies can all be seriously costly mistakes.

It’s therefore vital to pay close attention to the work that your trustee performs and not just take it for granted that they are providing the type of high-quality service you expect. Furthermore, you must exercise the utmost due diligence when selecting a trustee, ensuring that they have the necessary credentials, experience, and a proven track record of ethical conduct and high standards.

Book a free initial consultation with our experts.

Book a call

Is there such a thing as a “registered trustee” in Switzerland?

While the general job title of “trustee” is not legally protected in Switzerland, trustees may use the state-protected title of “Trustee with federal professional certificate” after completing specific training and a professional examination in the field of trust and fiduciary services.

For those who are concerned about the credibility of their prospective trustee partner, choosing a trustee with this certification can provide some level of confidence in the trustee’s qualifications and expertise. That said, it is certainly not a guarantee of high-class service.

Even if a trustee has this certification, clients should still perform their own due diligence. This includes checking the trustee’s reputation, asking for references, and verifying their track record. One of the primary functions of a trustee is to help their clients optimize their taxes, and that takes a great deal of experience and skill

Here you can easily calculate the costs of your accounting.

Price calculator

How do you know your trustee isn’t doing enough?

It may be difficult to know for sure whether your trustee is adequately fulfilling their duties, especially if you’re not experienced in financial and legal matters yourself. However, there are several red flags that may indicate it’s time to consider finding a new trustee:

1. Poor communication

A reliable trustee should always maintain regular and transparent communication with their clients. If you find that your trustee is difficult to reach, fails to provide timely updates and replies, or is vague in their responses, it may be a sign that they are not fully engaged in managing your affairs.

Misunderstandings and lack of communication can have damaging legal consequences. A competent and responsive trustee is one that is accessible and readily available to address any of your concerns and keep you updated on important fiduciary matters.

2. High fees or unexplained charges

A good trustee is a highly trained expert, which does come at a price, but there are limits to what you should be willing to pay. Your trustee should take responsibility for managing your assets efficiently and transparently. If you feel that their fees are unreasonably high or notice unexpected charges without a clear explanation, it could indicate that your trustee is not handling your finances with the level of integrity required.

It’s essential to clearly establish the fee structure with your chosen trustee in advance to avoid any surprises, and to choose a trustworthy partner who provides you with transparent rates.

3. Missed deadlines and errors

A trustee who frequently misses important deadlines, such as filing tax returns or submitting financial statements, is not fulfilling their fiduciary duty. Such negligence can lead to serious legal and financial consequences for you as the client. Equally damaging is an unskilled trustee who makes errors in your financial reporting or in calculating your tax returns. This can result in losses if deductions and rebates have not been properly accounted for, and even penalties or legal action with the tax authorities in severe cases.

4. Conflicts of interest and ethical concerns

Trustees should always act in the best interests of their clients. It’s therefore essential to hire a trustee who doesn’t have any direct personal involvement in your financial affairs that could sway their decisions. If you suspect that your trustee is making decisions that benefit themselves or another party at your expense, it is a serious breach of their fiduciary duty and a clear sign that you need to find a new trustee.

Additionally, if you notice that your current trustee is engaging in any unethical practices, such as encouraging you to illegally evade taxes or providing advice which appears in contradiction with the law, you should act immediately. Finding an ethical and law-abiding trustee to protect your financial wellbeing should be your highest priority.

5. Inadequate expertise and advice

As mentioned, the job title “trustee” is not protected in Switzerland. This creates a higher risk of unqualified and incompetent trustees offering their services to unknowing clients.

If your trustee consistently provides poor advice or demonstrates a lack of knowledge in critical areas, it could indicate that they are not qualified to handle your affairs. This is especially concerning if their advice leads to financial losses or missed opportunities.

Tax laws and regulations are complex and always evolving. A competent trustee should stay up to date with these changes and have a deep understanding of how they apply to your specific situation

6. Outdated systems and procedures

In today’s fast-paced business environment, it’s essential for trustees to use up-to-date systems and procedures. If your trustee relies on outdated technology or processes, such as analog working methods and cumbersome paperwork, it could lead to inefficiencies, errors, and a lack of responsiveness to your needs.

Modern tools and practices are critical for ensuring accurate and timely management of your affairs. With advanced digital fiduciary and accounting services, you can directly synchronize your company’s internal accounting system with your trustee and thereby transmit important data in real time. Make sure you find a good trustee partner where smooth digitalized service is the standard.

7. No personalization

Every company’s needs are unique, and a one-size-fits-all approach simply won’t suffice. While most trustees can fulfil their bare minimum duties, when it comes to offering sound, personalized advice, many fall short of the mark.

If your trustee doesn’t take the time to understand your specific situation and tailor their services accordingly, it’s a sign of laziness that shows they may not be fully committed to providing the best possible service. Personalization is key to ensuring that your trustee is truly acting in your best interests and helping you achieve the most optimal financial outcomes.

Book a free initial consultation with our experts.

Book a call

So, what next? Can you change your trustee?

So, what happens if you’ve come to realize that your current trustee isn’t meeting your expectations? Can you just switch to a new one?

The good news is: Yes, you have the right to change your trustee at any time if you feel your needs are not being properly met. In fact, if you are faced with this situation, changing your trustee is the only logical choice.  

If you have built up a long-term relationship with your current trustee, making the change may feel difficult, but it’s the only way to save your business from further damage and inefficiency. With careful consideration and planning, you can ensure a smooth transition.

Changing to a new trustee involves the following stages:

  1. Review your contract with your current trustee: Many agreements will outline the process for terminating the relationship, including any notice periods or penalties for early termination. It’s essential to follow these procedures to avoid any legal complications.
  • Find and engage a new trustee: Once you’ve decided to change trustees, you need to carefully identify a new one who can better serve your needs. This involves thorough research, including seeking recommendations, discussing your expectations with potential candidates, and reviewing their credentials. We’ll discuss in more detail what you should look for when selecting a new trustee.  
  • Transfer documents and assets: Finally, ensure that all necessary documents and assets are transferred from your old trustee to the new one. This process should be handled with care to avoid any disruption in the management of your affairs.

Speak to your new trustee for guidance on the best approach to handling the changeover, and what data they require from your previous trustee. They will likely need at least the following:

  • A presentation of your financial situation.
  • Annual accounts, including income statements and balance sheets for the last three years.
  • Statement of accounts including fixed assets.
  • List of open items with customers and suppliers.
  • Business reports.
  • Employment contracts and agreements, including pay slips, social security contribution statements, and wage tax registrations.
  • Income tax returns for the current and previous years.

Here you can easily calculate the costs of your accounting.

Price calculator

What should you look for in your new trustee?

Finding the right trustee involves more than just checking their qualifications. You need to be clear about what qualities are most important to you, and your specific expectations for your new fiduciary partnership.

Here are some key factors to consider when evaluating potential trustees in Switzerland:

  • Expertise and experience: You should look for a trustee who has the appropriate qualifications and experience in Swiss tax and accounting regulations, and a proven track record in managing assets similar to yours. Good indicators are professional certifications, years of experience, and specialization in areas which align with your specific requirements and industry.
  • Reputation and references: Check the trustee’s reputation within the industry and ask for references from previous clients. A trustworthy trustee will have a history of satisfied clients who can vouch for their integrity and professionalism. Try to get recommendations from trusted sources, such as friends and family, or professional networks.
  • Transparency and communication: A good trustee should be transparent in their dealings and maintain open lines of communication. They should provide regular updates and be willing to explain their decisions and actions in a way that you can understand.
  • Fee structure: Inquire about the trustee’s fee structure upfront and make sure it matches your budget and expectations. Consider the value you will receive from their services and the potential savings they can provide, and weigh these against the costs.
  • Flexibility and adaptability: The financial landscape is constantly changing, and a good trustee should be able to adapt to new circumstances and challenges. Look for someone who is proactive in identifying potential issues and finding solutions that fit with your unique goals.

Book a free initial consultation with our experts.

Book a call

Do you need a reliable trustee partner in Switzerland?

Finding a trustworthy and competent trustee in Switzerland can be challenging, but it’s crucial for the effective management of your financial and business affairs. At Nexova, we pride ourselves on being a reliable trustee partner for startups and SMEs in Switzerland.

Our team of accounting, tax and legal experts are committed to providing personalized, transparent, and ethical services tailored to meet the unique needs of our clients. With our extensive experience and deep understanding of the Swiss financial landscape, and our state-of-the-art digital accounting and tax services, we are well-equipped to support you in achieving your business and financial goals.

Whether you need assistance with accounting, tax planning, or financial management, Nexova is your number one choice for a trustee you can rely on. Contact us today to find out more about how we can help steer your business on the road to lasting success.

FAQ

Answers at a click

What services can a trustee provide?

A trust company in Switzerland can provide a wide range of services, including bookkeeping, tax planning, financial accounting, VAT and business and economic consulting. A trust company can also represent you in company formation, nominee directorships and business transactions, manage assets on your behalf and ensure compliance with relevant laws and regulations.

What are the most important duties and obligations of a trustee towards his clients?

Zu den Hauptaufgaben eines Treuhandunternehmens gehört es, im besten Interesse seiner Kunden zu handeln, das Vermögen effizient zu verwalten, Transparenz zu wahren und Interessenkonflikte zu vermeiden. Er ist außerdem verpflichtet, seine Kunden regelmäßig auf dem Laufenden zu halten und ihnen alle relevanten Informationen offenzulegen.

How much does a trustee cost?

The cost to a trust company can vary depending on the services provided and the complexity of the client’s needs. Some trustees charge a flat fee, while others may charge an hourly rate or a percentage of assets under management. It is important to discuss fees in advance and ensure that there are no hidden costs.

The typical hourly rate for a trustee in Switzerland is between CHF 100 and CHF 250, but in extreme cases up to CHF 400 or more can be charged. It is important to understand that a higher hourly rate does not always equate to a better service. Rates in excess of CHF 250/hour should be treated with caution.

How do I check the qualifications of a trustee?

You can check the qualifications of a fiduciary by checking their certifications, e.g. the designation “fiduciary with a federal certificate of competence”. However, a federal certificate of competence is not always a guarantee or a seal of approval for high-quality services. In most cases, checking references and examining the fiduciary’s track record of handling similar cases is a much better sign of competence.

A simple gut feeling and a sense of confidence and trustworthiness when discussing your financial affairs with your potential trustee are important indicators that should not be ignored either.

Can I change my fiduciary agency if I am not satisfied with its services?

Yes, you can change your trustee office if you are not satisfied with its services. This usually involves reviewing your contract, submitting notice of termination and selecting a new trustee. It is important that you follow the correct procedures to avoid legal complications.

When is the best time to change trustee?

While you can change trustees at any time, switching in the middle of the tax year or during a key tax period can disrupt the continuity of your tax planning and preparation. If possible, you should aim to switch after your current trustee has completed the work you have already started and there is not too much work left to do. The best time is usually at the end of the tax year. In this way, possible complications can be reduced to a minimum and additional costs avoided.

What should I do if I suspect that my trustee is not acting in my best interests?

If you suspect that your trustee is not acting in your best interests, it is important that you address the problem immediately. In almost all cases, the only viable solution is to replace the trustee as soon as possible. If there are serious errors or unethical behavior, you may need to seek legal advice.

How do I choose the right trustee?

When choosing the right fiduciary, you need to evaluate their experience, reputation and ethical standards. Look for someone who has expertise in your particular area of need, a commitment to transparency and a track record of satisfied clients.

Outsource your accounting? Let’s work together.

0 Comments
Submit a Comment

Your email address will not be published. Required fields are marked *