“Wealth Management at a Global Level and in Switzerland” Highlights

Each Fall, the Swiss Banking Association publishes their annual wealth management study.

Here is the full study: Wealth Management at a Global Level and in Switzerland

Here are 10 highlights from the study:

  1. Private financial assets worldwide benefited from positive stock market performance, economic growth and rising savings rate in emerging markets in 2012, growing by 7.8 percent to USD 135,500 billion.
  2. The assets of individuals with freely available net assets of more than USD 1 million (high net worth individuals, HNWIs) rose by a full 10 percent in 2012 to USD 46,200 billion.
  3. HNWI assets in APAC are forecast to grow by 9.8 percent annually between now and 2015, well above the predicted growth rates for the Middle East (6.8%), Europe (6.2%) and South America (3.1%).
  4. Assets managed cross-border were up 9 percent year-on-year to USD 8,500 billion. Switzerland is still the global market leader in this area with 26 percent or USD 2,200 billion of AuM. Estimates suggest that Switzerland is set to maintain its position for the foreseeable future, despite intense competition from other countries.
  5. Global assets under management totalled USD 62,400 billion in 2012, an increase of 9 percent year-on-year. This took assets back above pre-crisis levels for the first time. Growth was driven in particular by the positive performance of the equity and bond markets.
  6. Swiss banks managed CHF 5,565 billion in 2012, 51 percent of which came from abroad and 49 percent from within Switzerland.
  7. The cost-income ratio across all banks in Switzerland was 70.4 percent in 2012, much higher than in 2005. The main drivers of this increase were a reduction in operating income coupled with a rise in operating expense.
  8. In view of the greater cost and regulatory pressures, many have expected a glut of consolidations, however the amount of activity has been much lower than expected with a total of 14 mergers and acquisitions in the Swiss banking sector in 2012 and 2013.
  9. The OECD is rapidly advancing towards formulating a proposal for a global model for the automatic exchange of information (AEI). On 6 September 2013, the G20 agreed to establish AEI as a global standard by 2015.  The SBA anticipates that implementation of the automatic exchange of information within the OECD will lead to a reduction in the volume of assets managed in Switzerland in the short term, but should stabilize over the longer term, indeed increase the amount of assets managed in Switzerland.
  10. The SBA predicts that MIFID II is possibly the most onerous regulation affecting Swiss banking industry and that FATCA is expected only to have low impact.

Despite these highlights, the deterioration of the KPIs from 2000 – 2013 show a more sobering story … without a relentless focus on client delight, radical innovation, automation, outsourcing, Switzerland’s pole position as “the worlds wealth manager” is clearly threatened.

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