Writing confidentially, a former client of a Swiss bank spoke to eprivateclient on the little known issue of Swiss Retrocession fees and this was what he revealed…

As a recap, Swiss retrocessions refer to "Kickback Commissions" paid out to banks by third parties. Swiss rulings in 2006, 2012 and 2017 clarified these as belonging to the client, payable on request. These relate to Trusts as well as individual accounts.

However Liti-link, a specialist retrocession firm, notes that it has only processed 40 UK clients out of a total of 1050 cases  despite the UK having the highest number of potential claimants (in excess of 100,000).

A mixture of a lack of knowledge and conflicts of interest dominate this area...

In terms of the Big 4 accountancy firms, the conflicts are clear. They are unwilling to tell clients due to their Swiss partners deeming it economic suicide for their Swiss banking relationships.

This extends beyond this group to mid-tier firms and combined, these entities are sitting on tens of thousands of clients who could claim if they knew. Is this really in the client's interest? The ethics of the industry again come under the spotlight.

The conflict of interest extends to wealth managers, IFA's, family offices and trustees. From my work there is more a lack of knowledge about Swiss retrocession claims in general than a deliberate policy of concealment. To quote Upton Sinclair "It is difficult to get a man to understand something when his salary depends upon his not understanding it."

I have spoken to hundreds of individuals regarding this issue and I keep coming back to the same question - is it in the client’s interest to not make them aware of this issue?

The process is simple for the client, established operators like Liti-link offer a no charge service for unsuccessful claims so it is in effect a free hit for clients and there is a strong ethical argument here.

Trustees need to be aware that they are exposing themselves to future liability claims by not making these claims. I am not sure the argument that we did not know will hold much weight.

I have recently spoken to boutique wealth mangers and tax advisers whom, while vaguely aware of this issue, had not actively informed clients as they were waiting for clients to request help with this issue. That is a bizarre argument to put forth if the client is highly likely to have never heard of this issue in the first place.

This is not a unique UK situation. I recently made the Israeli market aware of this issue and there has been a positive reaction by the financial community. That is not the case at present here and worryingly even when informed the attitude appears to be a case of sweeping it under the carpet.