Wealthy clients of private banks in Switzerland are demanding to know the extent to which they are financing "kickbacks" within the industry and are threatening legal action after a recent court case uncovered the practice of banks charging billions of francs in hidden fees.

Their anger follows a ruling by the Swiss Supreme Court which made it clear that private banks must tell their clients of any commission, fee or referral arrangements with fund advisers, and get authorisation from their clients to pay these fees. If clients refuse to agree, they would be entitled to refunds as a result of the ruling. It is understood that these fees, known in the industry as retrocessional fees, account for up to half of all the fees paid within the industry.