Wealth in Switzerland: HNW Investors 2017

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GlobalData’s “Wealth in Switzerland: HNW Investors 2017”, report analyzes the investing preferences and portfolio allocation of Swiss HNW investors. The report is based on our proprietary Global Wealth Managers Survey.

Inheritors form the largest segment among Swiss HNW individuals, who have generated their wealth mainly through property and real estate, in addition to professional services. Expats in Switzerland account for 8.4% of the HNW population, who along with the rest of the country’s HNW population are keen to invest a proportion of their wealth locally. Looking ahead, greater demand for wealth management services such as inheritance and financial planning is expected.

Scope

- Profiles the average Swiss HNW investor in terms of their demographics and analyzes the expat opportunity in Switzerland.

- Analyzes which wealth management mandates are preferred among Swiss HNW investors and how the demand will develop looking forward.

- Examines the allocation of Swiss HNW investors’ portfolios into different asset classes and how the allocation is expected to develop in the future.

- Analyzes the product and service demand among Swiss HNW investors.

Reasons to buy

- Develop and enhance your client targeting strategies using our data on HNW profiles and source of wealth.

- Give your marketing strategies the necessary edge and capture new clients using insights from our data on HNW investors’ drivers for seeking investment advice vs self-directing.

- Tailor your investment product portfolio to match the current and future demand for different asset classes among HNW individuals.

- Develop your service proposition to match the service and product demand expressed by Swiss HNW investors and react proactively to the forecasted change in demand.

Companies mentioned

Family Office Selection Services

Guardian Wealth Management

UBS

Wüest Partner

Family Office Selection Services

Guardian Wealth Management

UBS

Wüest Partner

Table of Contents

Table of Contents

EXECUTIVE SUMMARY 2

1.1. HNW clients prefer a heavily managed portfolio with notable exposure to equities and bonds 2

1.2 ...

Table of Contents

EXECUTIVE SUMMARY 2

1.1. HNW clients prefer a heavily managed portfolio with notable exposure to equities and bonds 2

1.2. Key findings 2

1.3. Critical success factors 2

2. PROFILING THE SWISS HNW INVESTOR 7

2.1. Inheritance accounts for the largest proportion of Swiss HNW wealth 7

2.1.1. The majority of Swiss HNW individuals are males over the age of 50 7

2.1.2. One third of Swiss HNW clients inherited their wealth 8

2.1.3. Swiss HNW wealth is sourced from property and professional services 9

2.1.4. With the exception of director roles, Swiss HNW investors are more likely to fill leadership roles than the European average 10

2.2. Expats in Switzerland form 8.4% of the population 11

2.2.1. The proportion of expats in Switzerland is more prominent than across Europe 11

2.2.2. HNW expats can obtain residency and citizenship through a range of options 12

2.2.3. Western Europe is the leading feeder region for HNW expats in Switzerland 13

2.2.4. Cost considerations motivate expats to move investments to Switzerland 14

3. SWISS HNW INVESTMENT STYLE PREFERENCES 17

3.1. Swiss HNW investors have a propensity for their wealth to be professionally managed 17

3.1.1. Discretionary mandates are favored among Swiss HNW investors 17

3.1.2. Swiss HNW investors seek professional management for expertise and saving time 18

3.1.3. Swiss HNW investors use more wealth management firms than the regional average 19

3.2. Swiss HNW individuals prefer professional wealth management 20

3.2.1. Greater demand for traditional mandates is widely forecast 21

3.2.2. HNW investors favor advisory mandates for the guidance/control balance 22

3.2.3. HNW individuals prefer to have exclusive control 24

4. UNDERSTANDING ASSET ALLOCATION TRENDS AMONG SWISS HNW INVESTORS 25

4.1. Current asset allocation is heavily weighted towards equities 25

4.1.1. Equity and bond investments dominate Swiss HNW portfolios 25

4.1.2. Equity investments make up over one third of Swiss HNW portfolios 26

4.1.3. Bond investments are currently notable but forecast to decline 28

4.1.4. HNW individuals prefer to hold cash directly 30

4.1.5. HNW client portfolios allocate a minimal proportion to property investments 32

4.1.6. Alternatives constitute 11.3% of the typical Swiss HNW portfolio 34

4.1.7. Commodities constitute a minimal proportion of the typical HNW portfolio 36

5. SWISS HNW PRODUCT AND SERVICE DEMAND 39

5.1. Planning services are in high demand in Switzerland 39

5.1.1. Inheritance planning presents an opportunity for wealth managers to resonate with older HNW investors and business owners 39

6. APPENDIX 43

6.1. Abbreviations and acronyms 43

6.2. Definitions 43

6.2.1. HNW 43

6.2.2. Liquid assets 43

6.3. Methodology 43

6.3.1. GlobalData’s 2016 Global Wealth Managers Survey 43

6.3.2. GlobalData’s 2015 Global Wealth Managers Survey 44

6.3.3. GlobalData’s WealthInsight 44

6.4. Bibliography 44

6.5. Further reading 46

List of tables

List of figures

List of Figures

Figure 1: 74.8% of Swiss HNW investors are over the age of 50 8

Figure 2: 50% of Swiss HNW investors ...

List of Figures

Figure 1: 74.8% of Swiss HNW investors are over the age of 50 8

Figure 2: 50% of Swiss HNW investors accumulate their wealth as a family business owner or first-generation entrepreneur 9

Figure 3: Almost half of Swiss HNW individuals have generated wealth from property and real estate 10

Figure 4: Swiss HNW investors are likely to hold leadership positions 11

Figure 5: Expats constitute a small but important proportion of the Swiss HNW population 12

Figure 6: The majority of HNW expats in Switzerland are from Western Europe 14

Figure 7: Swiss HNW expats invest a proportion of their wealth in Switzerland in order to avoid foreign exchange fees and charges 15

Figure 8: Guardian Wealth Management offers offshore and mortgage services to expat investors 16

Figure 9: Swiss HNW investors hold the greatest amount of wealth in discretionary mandates 18

Figure 10: Lack of time and lack of expertise motivate Swiss HNW investors to seek professional management 19

Figure 11: Swiss HNW investors prefer to place their managed wealth across three or more professionals 20

Figure 12: Wealth managers currently experience varied demand across investment services 21

Figure 13: The greatest demand is expected for services that offer access to professional advice 22

Figure 14: Reasons for investing a proportion of wealth via discretionary mandates differ from those for advisory mandates 23

Figure 15: Swiss HNW investors display clear reasons for investing their wealth directly 24

Figure 16: Equities and bonds account for the largest asset allocations 26

Figure 17: Like the rest of HNW investors in Europe, Swiss HNW individuals favor equity investments 27

Figure 18: The majority of wealth managers expect an increase in demand for equity holdings 28

Figure 19: Swiss HNW portfolios demonstrate a near-equal proportion of direct and fund holdings 29

Figure 20: 85% of wealth managers expect an increase in demand for bond investments 30

Figure 21: Swiss HNW cash allocations favor local currency deposits 31

Figure 22: Swiss HNW investors do not hold cash for current returns and the expectation of higher rates 32

Figure 23: Swiss property investments are overwhelmingly held through funds 33

Figure 24: Perception of safety is the main reason for holding property investments 34

Figure 25: Swiss HNW investors’ allocation into alternatives is above the European average 35

Figure 26: Alternatives are favored for features of diversification and future capital appreciation 36

Figure 27: Physical gold and commodity funds represent the majority of commodity allocations 37

Figure 28: Demand for commodities is expected to increase on a regional scale as well as in Switzerland 38

Figure 29: 80.3% of wealth managers experience strong demand for pension planning services 40

Figure 30: Strong demand for financial planning services is expected in the next two years 41

Figure 31: Union Bancaire Privée’s FOSS offers support to families in their search for a family office 42

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