Is Private Banking Worth the Fees?
Figure out the answer yourself using the blog post below!
One of the most common questions Mikael Hellberg gets from investors who have accumulated a substantial amount of capital is: “Should I transfer this to Private Banking?”
His short answer is: Sometimes!
During Mikael Hellberg’s 35 years in the financial industry—including a stint as the manager of portfolios worth over 20 billion kronor at Handelsbanken Fonder—he has seen firsthand how the industry packages and sells its services. Read his original article in full here.
Private banking is worthwhile when you actually make use of specialized services in the areas of taxation, complex legal matters, and complicated generational transitions.
However, it’s rarely justified when, in practice, you’re paying a high price for general market commentary and a false sense of security. The problem is that most customers never see the total cost.
Below is an overview of the fees—how to understand them—and how to create a professional alternative.
Five fee tiers to be identified
None of the major Swedish banks publishes a comprehensive price list for private banking. When you meet with the bank, the discussion almost always centers on just one figure: the management fee. But to understand what the service actually costs, you need to ask for a breakdown that covers all five fee categories:
Management fee: the ongoing fee paid to the bank, usually a percentage of assets under management.
Underlying fund fees: the fees charged by the funds in which the bank invests your capital. This is usually the largest component, and the bank tends to choose its own expensive, actively managed funds.
Brokerage fees and trading costs: transaction costs associated with buying and selling, over which you rarely have control in discretionary management.
Account and custody fees: fixed fees for the custody service itself.
One-time costs: administrative fees associated with, for example, moving a securities account. These are usually not discovered until the day you want to close the account.
What does this information tell us?
The Swedish Financial Supervisory Authority has determined that older savers (who make up the core of Private Banking) pay nearly twice as much in fund fees as younger savers. Thus, those who have the most capital to lose due to high fees usually pay the most.
The Invisible Drain: The Cost of One Percentage Point?
Percentages are abstract. Kronor are not!
Assume a principal of 5 million kronor and a conservative market return of 8 percent per year. We compare two total fee levels (including all five tiers) of 1.5 percent and 0.4 percent per year, respectively.
After ten years, the difference is 1,090,000 kronor. That amounts to nearly 22 percent of your initial capital—which has been eroded by a fee difference of just 1.1 percentage points!!
The Half That No One Sees
Of the 1,090,000 kronor, approximately 780,000 kronor are contributions you have actually paid. The remaining 310,000 kronor is something entirely different: lost returns. Money that your contributions could have generated if they had been left to grow (compound interest). This does not appear on any account statement and is not mentioned at any meeting.
The Alternative: Create your own Institutional Management
So when is it worth the price tag? If you have a complex closely held company and a generational transition on the horizon, the bank’s lawyers may be worth the fee. But if your primary needs are structure, discipline, and professional portfolio decisions, you’re paying for a specialized package that you don’t use.
That’s exactly why Mikael started Aktieutbildning.nu
Instead of handing over decision-making authority and paying a percentage that increases as your capital grows, Mikael’s philosophy is based on you keeping your capital with your own online broker while gaining access to the same decision-making support and methodology that the pros use.
Today, we don’t have to guess. By combining thorough technical analysis (e.g., using Vikingen FS), an understanding of macroeconomics, and AI-driven models, we can effectively identify the market’s regime, filter out the right trends, and eliminate human emotions from our investments. Data trumps gut instinct—every time.
Watch this video in which Mikael Hellberg shares his thoughts on Vikingen Financial Software and explains how he uses the program.
Build Your Portfolio Step by Step with Aktieutbildning.nu and Vikingen
We’ve created a structure that lets you choose where you want to start, depending on your level of experience:
1. Lay the Right Foundation (Free)
The most important thing is to have a clear strategy and understand how the market moves. That’s why Mikael is sharing his best tools to help you get off to the right start. Choose what works best for you: 👉 Download the free introductory course here 👉 Download the e-book on Technical Analysis here
2. Learn to Read the Market
A common mistake is buying at the wrong stage of the economic cycle. To help you understand the bigger picture, Mikael regularly hosts an open webinar Börssnack. Here, he dives deep into macroeconomics and examines where we stand right now, completely free from sales hype and noise. 👉 Sign up for the next Börssnack here
The Börssnack Strategy—A Global Stock Strategy E-book here
3. The Comprehensive Solution: Investment Portfolios
For those of you who have the capital and the ambition, but not the time to do the analysis yourselves, there’s the main service, “Börsportföljerna.” This is a fixed-term subscription where you retain decision-making authority and control over your own accounts, but Aktieutbildning.nu does the heavy lifting.
Join Mikael Hellberg’s “Börssnack” on Wednesdays from 7:00 to 8:00 p.m. CET
A live webinar every Wednesday where we review the market, analyze our holdings, and answer questions. 👉 Learn more and become a member of Börsportföljerna here
Summary
Managing a large amount of capital requires discipline and a systematic approach. Anyone who switches from an expensive banking solution to “just buying index funds,” but loses their structure and sells in a panic during the next stock market crash, has gained nothing. The fee is only half the equation. A data-driven process is the other half.
We invite you to build this process together with Mikael Hellberg at Aktieutbildning.nu in collaboration with Vikingen Financial Software!
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Yours sincerely
