Switzerland Wealth Management – Market Sizing and Opportunities to 2027

Switzerland Wealth Management Report Overview

Switzerland’s affluent population (including HNW and mass affluent individuals) has shown steady growth in recent years. Collectively, HNW and mass affluent individuals accounted for more than 95% of the total population in 2022. It is among the highest in the world.​

The Switzerland Wealth Management market research report will help to keep up to date with the Swiss wealth management industry, looking at investors’ asset allocation by affluence bandings as well as a detailed picture of where HNWs distribute their investments. It will also assist in understanding offshore investment drivers for the mass affluent, emerging affluent, mass market, and HNW individuals.

Switzerland Wealth Management Market Dynamics

2022 saw a difficult year for the Swiss market, with a small decrease in the affluent population. Switzerland’s inflation rate hit a 29-year high in 2022 of 3.5%, however, the country is already an expensive nation compared to the rest of the world, with Zurich and Geneva ranking as two of the most expensive cities in the world. Individuals are used to spending smaller proportions of their money on essential items so high inflation has less impact on the cost of living in Switzerland. Therefore, the number of affluent individuals has continued to grow in Switzerland in 2023, even through a period of high inflation.

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Switzerland Wealth Management Market - Investment Preferences

The key investment preferences in the Switzerland wealth management market are advisory mandates, discretionary mandates, execution-only mandates, and taking aid of the robo-advisor service, among others. In Switzerland, discretionary mandates accounted for the majority share of the total managed wealth of an average Swiss HNW investor in 2022. This is good news for wealth managers, given that discretionary mandates yield higher fee income compared to other investment mandates.

Switzerland Wealth Management Market Analysis by Investment Preferences, 2022 (%)

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Switzerland Wealth Management Market - Investment Channels

The key investment channels in the Switzerland wealth management market are advisors at investors’ main banks, independent financial advisors (IFAs), investment management companies, pension companies, robo-advisors, and investment platforms at main banks among others. In 2022, advisors at investors’ main banks are the preferred channel.

There is often a well-established relationship between a mass affluent client and their bank as they will probably hold multiple accounts, loans, and other financial products with their main provider. Advisors from main providers have a brand trust, personalization, and familiarity on their side; attracting clients to seek out wealth management services with them. Even though using an advisor from a main provider will have higher fees than other channels, the mass affluent are willing to pay for these services.

Switzerland Wealth Management Market Analysis by Investment Channels, 2022 (%)

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Switzerland Wealth Management Market - Reasons for Holding Wealth Offshore

The key drivers to hold wealth offshore in the Switzerland wealth management market are tax efficiency, local political/economic instability, better returns, and better investment product range abroad among others. In 2022, expectations of better returns and better investment product range are key drivers for Swiss investors to offshore their wealth.

Switzerland Wealth Management Market Analysis by Reasons for Holding Wealth Offshore, 2022 (%)

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Switzerland Wealth Management Market - Asset Allocation Classes

The major asset allocation classes for HNW investors in the Switzerland wealth management market include mutual funds, equities, bonds, and deposits. Economic activity rebounded in Q2 2021, supported by continued growth in exports and improved investor sentiments led by increased private consumption which boosted equity and mutual fund values, as well as overall wealth.

As is the case with most countries, deposits retained the bulk of retail financial wealth in 2022. However, the stock market rally resulting from a boost in retail investor risk appetite caused a shift in investments towards equities. The SMI registered a significant growth rate in 2021. Mutual funds also benefited due to the higher exposure to equities.​

Switzerland Wealth Management Market by Asset Allocation Classes, 2022 (%)

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Switzerland Wealth Management Market Asset Classes Outlook (%, 2022)

• Mutual funds
• Equities
• Bonds
• Deposits

Switzerland Wealth Management Market Investment Channel Outlook (%, 2022)

• Advisors at Investors’ Main Banks
• Independent Financial Advisors (IFAs)
• Investment Management Companies
• Pension Companies
• Robo-Advisors
• Investment Platforms at Main Banks

Scope

• Swiss affluent individuals held 98.9% of the country’s total onshore liquid assets in 2022, with the mass affluent segment alone holding nearly 62.3%

• In 2022, Switzerland’s base rate rose dramatically to counter inflation that had not been seen since the 2008 financial crisis. This, along with the threat of Credit Suisse’s collapse, caused residents and non-residents to seek safety from bond portfolios. As a consequence, the bond market experienced one of its busiest years with five-year swap rates skyrocketing to 205 basis points (bps) in September 2022.

• Equities accounted for a notable share of the average Swiss HNW portfolio in 2022. Despite the Russia/Ukraine conflict-induced volatility, investors chased capital appreciation opportunities in the equity space which reflects the high-risk appetite of this investor class.

• Across all affluent groups, the humble savings account is the most-popular place for asset allocation. Within the mass affluent segment there is considerably more risk appetite, even though savings accounts are still the most-popular allocation.

Key Highlights

• In 2022, Switzerland’s base rate rose dramatically to counter inflation that had not been seen since the 2008 financial crisis. This, along with the threat of Credit Suisse’s collapse, caused residents and non-residents to seek safety from bond portfolios. As a consequence, the bond market experienced one of its busiest years with five-year swap rates skyrocketing to 205 basis points (bps) in September 2022.
• Equities accounted for a notable share of the average Swiss HNW portfolio in 2022. Despite the Russia/Ukraine conflict-induced volatility, investors chased capital appreciation opportunities in the equity space which reflects the high-risk appetite of this investor class.
• Across all affluent groups, the humble savings account is the most popular place for asset allocation. Within the mass affluent segment, there is considerably more risk appetite, even though savings accounts are still the most popular allocation.

Reasons to Buy

• Keep up to date with the Swiss wealth management industry, looking at investors’ asset allocation by affluence bandings as well as a detailed picture of where HNWs distribute their investments.
• Understand offshore investment drivers for the mass affluent, emerging affluent, mass market, and HNW individuals.
• Develop knowledge of resident savings and investments by looking at the performance and net inflows of bonds, mutual funds, equities, and deposits in Switzerland.