Wealth Management In Switzerland 2006

Published by: Datamonitor

Published: Aug. 15, 2006 - 91 Pages

Table of Contents

EXECUTIVE SUMMARY

Introduction

Wealthy clients in Switzerland

Competition for wealthy customers

Products and distribution

INTRODUCTION

What is this report about?

Who is the target reader?

How to use this report

Note to readers

CHAPTER 1 WEALTHY CLIENTS IN SWITZERLAND

Introduction

Key findings

The Swiss mass affluent and HNW market has seen steady growth in the last four years

There are almost 1,600,000 wealthy individuals in Switzerland

Wealthy individuals in Switzerland hold more more than EUR300bn in onshore liquid assets

Onshore liquid assets in Switzerland will grow to EUR465bn by 2010

Inheritors represent biggest opportunity in Swiss wealth market

Swiss investors put up to 30% of their liquid assets offshore

The main motivation for Swiss investors to put their assets offshore is better investment opportunities

The Cayman Islands and Switzerland are preferred offshore centres among Swiss investors

Private clients in Switzerland are demanding a high level of interaction and high return on investments

Brand, image and reputation and service quality are the key determinants of choice of wealth manager in Switzerland

Referrals from exisiting clients is the number one customer acquisition technique in Switzerland

Clients are demanding more contact with their wealth manager now than two years ago

Achieving higher returns is key for Swiss private banking clients

Regular contact and quick problem solving are the best ways to retain clients

There are several key reasons why private clients in Switzerland are leaving a wealth management service

Most private clients in Switzerland have more than two wealth managers

Wealth managers should try to increase clients' share of wallet

Swiss wealth managers tend to have long-term relationships with their private clients

Supplementary data

CHAPTER 2 COMPETITION FOR WEALTHY CUSTOMERS

Introduction

Key findings

Switzerland represents the wealth market par excellence, with strong domestic providers leading the way

UBS, Credit Suisse and Julius Bär are perceived by their peers to be the largest wealth managers in Switzerland

Swiss Private Bankers: considered to be the real private banking

The silence after the storm: green light for banking consolidation?

Minimum investment thresholds vary among wealth managers

Swiss wealth managers are most concerned about competition from domestic players

There is also competition from other providers, although to a lesser extent

The main competitors will remain the same over the next few years

Swiss wealth managers are concentrating on improving investment performance and obtaining new clients

Improving investment performance will drive revenue in the next two years

Increasing share of wallet will come through more face to face contact, offering financial planning and more open architecture

Developing new distribution approaches/channels and improving CRM and support systems are the main strategic initiatives ahead

IT and CRM system costs are the main concern in controlling cost bases

Swiss wealth managers tend to organize their business around a key relationship mananger, but not all specialize in key client segments

Only 6% of Swiss wealth managers give their clients a single point of contact

50% of Swiss wealth managers do not have dedicated teams organized around specific customer groups

Most relationship managers in Switzerland are assessed based on revenue and profit

New relationship managers will come mostly by hiring them from other wealth managers

The poaching of whole teams from rival banks: the future of recruitment?

Supplementary data

CHAPTER 3 PRODUCTS AND DISTRIBUTION

Introduction

Key findings

Inheritance planning has most potential while general insurance and foreign exchange are least attractive

Inheritance planning and alternative investments have the most business potential in Switzerland

There is only moderate interest in payment mechanisms, general insurance and foreign exchange

Swiss wealth managers will focus on alternative investments, financial planning, and inheritance planning in the next two years

Swiss wealth managers are interested in developing new distribution approaches/channels

Two thirds of wealth managers in Switzerland will be focusing on developing new distribution channels/approaches in the next year

Financial advisors and accountants or lawyers are important distribution channels in Swiss wealth management

Financial advisors remain important distribution channels for wealth managers

Supplementary data

APPENDIX

Definitions

Aggregate

CAGR

High net worth (HNW)

Liquid assets

Liquid asset bands

Mass affluent

Research methodology

Wealth Management Market Leaders Survey 2006

Global Wealth Model Methodology

The UK sub model

European sub model

Forecasting methodology

Continuous refinement to the understanding of liquid wealth distribution

Datamonitor's wealth numbers compared with other wealth numbers

Further reading

Global Wealth Management SPP

Interactive Databases

Market Reports

Strategic Insight Reports

Wealth Management Competitor Tracker

Datamonitor Asia Pacific Wealth Management SPP

SPP writing team

List of Tables

Table 1: Number of Swiss MA and HNW individuals by liquid asset band, 000s, 2001-2005

Table 2: Swiss MA and HNW aggregate liquid assets by liquid asset band, EURbn, 2001-2005

Table 3: Forecasted number of Swiss MA and HNW individuals by liquid asset band, 000s, 2006-2010

Table 4: Forecasted Swiss MA and HNW aggregate liquid assets by liquid asset band, EURbn, 2006-2010

Table 5: What client types offer the greatest potential in your country in the next five years?

Table 6: In your opinion, what proportion of liquid assets do investors in your country put offshore?

Table 7: What is the main motivation for investors in your country to put money offshore?

Table 8: In your opinion, where do investors from your country prefer to put their offshore money?

Table 9: In your experience, what are the key influences that determine a client's choice of wealth management service?

Table 10: In your experience, what are the most effective customer acquisition techniques in your market?

Table 11: To what extent do you agree with the following?

Table 12: What are your clients most interested today?

Table 13: What is the best way to retain clients?

Table 14: In your experience, what are the most likely reasons for clients to leave a wealth management service?

Table 15: Which statement do you most agree with?

Table 16: Approximately what share of your clients' wallet do you think you have on average?

Table 17: How long has your client base, on average, been with you?

Table 18: Structure of the Swiss banking sector as of the end of 2005

Table 19: In your opinion, who are the biggest wealth managers in Switzerland? (open-end)

Table 20: What is your minimum asset threshold for new clients?

Table 21: What are the most pressing concerns for your business at present?

Table 22: How much of a threat to your wealth business are the following competitors today?

Table 23: How much of a threat to your wealth business will the following competitors be in three years?

Table 24: What will most determine revenue growth in the Swiss market in the next two years?

Table 25: What is the most effective means of increasing share of wallet?

Table 26: What strategic initiatives are you planning or implementing in the next year?

Table 27: What are your main areas of concern in controlling your cost base?

Table 28: Which best applies to your company's relationship management?

Table 29: Do you have dedicated teams set up in Switzerland to attract and manage any of the following customer groups?

Table 30: What quantitative measures are used to assess your relationship managers?

Table 31: Where will you get your staff from in the next three years?

Table 32: Please rate the following product areas in terms of their business potential among wealthy clients in your market during the next two years

Table 33: From the product areas just mentioned, which three will your company focus most resources on in the next two years?

Table 34: What strategic initiatives are you planning or implementing in the next year?

Table 35: How important are the following distribution channels for your wealth business today?

Table 36: To what extent do you agree with the following?

List of Figures

Figure 1: The number of Swiss mass affluent and HNW individuals has grown steadily since 2002

Figure 2: Liquid wealth of Swiss mass affluent and HNW individuals amounted to more than EUR300bn in 2005

Figure 3: The Swiss mass affluent and HNW market will reach EUR460bn by 2010, held by more than 2.2m people

Figure 4: Datamonitor forecasts steady growth in all asset bands for the Swiss market in the next 5 years

Figure 5: Inheritors offer the greatest potential in the Swiss market in the next five years

Figure 6: Swiss investors put up to 30% of their liquid assets offshore

Figure 7: Better investment opportunities is the main motivation for Swiss investors to put their money offshore

Figure 8: Cayman Islands and Switzerland are preferred offshore centers among Swiss investors

Figure 9: Brand, image and reputation and service quality are key influences that determine a client's choice of provider

Figure 10: Referrals from existing clients is the most effective client acquisition technique in the Swiss market

Figure 11: Clients are demanding more face to face contact with their wealth manager now than two years ago

Figure 12: Wealth managers' clients are most interested in achieving higher returns

Figure 13: The best way to retain clients is talking to them regularly

Figure 14: Swiss wealth managers identify several reasons why clients are leaving a wealth management service

Figure 15: Wealthy individuals in Switzerland tend to have more than two wealth managers

Figure 16: Wealth managers should concentrate on gaining a bigger share of clients' wallets

Figure 17: Swiss wealth managers tend to have long-term relationships with their clients

Figure 18: UBS, Credit Suisse and Julius Bär are perceived to be the biggest wealth managers in Switzerland

Figure 19: The wealth management market in Switzerland is dominated by domestic providers

Figure 20: Swiss Private Bankers are personally responsible for their bank's liabilities, a status that is enshrined in national law

Figure 21: Swiss wealth managers apply different minimum investment thresholds, varying from EUR10K to EUR250K

Figure 22: What are the most pressing concerns for your business at present?

Figure 23: Large wealth managers are perceived as strongest competitors

Figure 24: The main competitors will remain the same over the next three years

Figure 25: Improving investment performance and obtaining new clients will most determine revenue growth in the next two years

Figure 26: Increasing face to face contact is the most effective way of increasing share of wallet

Figure 27: Wealth managers will focus on developing new distribution approaches/channels and improving CRM and support systems

Figure 28: IT and CRM system costs are the main concern in controlling cost bases

Figure 29: Swiss wealth managers tend to provide their clients more than one contact

Figure 30: Half of surveyed wealth managers stated that they do not have dedicated teams set up to target and attract specific customers

Figure 31: Most relationship managers in Switzerland are assessed based on revenue and profit

Figure 32: New relationship managers will come mostly by hiring them from competitors

Figure 33: The biggest business potential lies in inheritance planning

Figure 34: Payment mechanisms, general insurance and foreign exchange are perceived to have less business potential

Figure 35: Swiss wealth managers will focus on alternative investments, financial planning, and inheritance planning

Figure 36: Two thirds of Swiss wealth managers plan to develop new distribution approaches/channels in the next year

Figure 37: Financial advisors and accountants or lawyers are seen as important distribution channels for Swiss wealth business

Figure 38: Financial advisors will remain an important distribution channel for Swiss wealth managers

Abstract

• Sizing and forecasting of mass affluent and high net worth individuals from 2001-2010, generated from Datamonitor's proprietary Global Wealth Model
• Data presented for 10 liquid asset bands, from EUR50K-75K to EUR3M+
• 16 Swiss wealth managers were surveyed during Datamonitor's Wealth Management Market Leaders Survey 2006
• Survey questions covered business and product/service development, client trends and attitudes, and general market issues

• Assess market attractiveness by reviewing size and growth forecasts up to 2010
• Improve client service through a greater awareness of their attitudes and concerns
• Assess the threats and opportunities for wealth managers in the market

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