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Wealth in Switzerland: Sizing the Market Opportunity

Wealth in Switzerland: Sizing the Market Opportunity

Summary

Wealth in Switzerland: Sizing the Market Opportunity, report analyzes Switzerland’s wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.

Growth continued in the Swiss wealth market, and the country remains a popular destination for offshore investments. However, increasing tax transparency pressures, continued negative interest rates, and global macroeconomic risks will decelerate both resident and non-resident market growth in future years. Wealth managers will need to collaborate closely with clients to maintain revenues in this challenging new reality.

Specifically the report -

  • Sizes the affluent market (both by number of individuals and the value of their assets) using GlobalData’s proprietary datasets.
  • Examines HNW clients’ attitudes towards non-liquid asset classes such as property, commodities, and offshore investments.
  • Analyzes which asset classes are favored by Swiss investors and how their preferences impact the growth of the overall savings and investments market.
  • Evaluates the size of the retail non-resident (offshore) market in Switzerland and foreign investors’ preferences.
Scope
  • At the end of 2017, affluent individuals held 94% of Switzerland’s total liquid assets - one of the largest proportions in the world.
  • The value of liquid assets held by affluent individuals increased by 5.6% during the year, driven mostly by positive stock market performance boosting mutual funds and equity investments.
  • Going forward, lethargic stock market performance and economic growth risks will lead to a decrease in the affluent individual population by 2022.
  • With automatic exchange of information now in place Swiss secrecy benefits are reducing, affecting the profitability of the country’s private banks.
Reasons to buy
  • Benchmark your share of the Swiss wealth market against the market’s current size.
  • Forecast your future growth prospects using our projections for the market to 2022.
  • Identify your most promising client segment by analyzing penetration of affluent individuals in Switzerland.
  • Evaluate your HNW proposition by understanding how the ever-changing tax system affects your HNW clients.
  • Review your offshore strategy and offering for non-resident investors by learning the dynamics in these markets.


  • Executive Summary
    • Economic factors influenced slow Swiss wealth market growth
    • Key findings
    • Critical success factors
  • The Swiss Wealth Market Expanded Only Slightly in 2017 due to Slow Economic Growth
    • Introduction
    • Growth will slow down in future years
      • 2017 saw slow yet positive growth in the Swiss economy
      • HNW individuals account for 2% of the population
        • Table Figure 1: 71% of the Swiss population is affluent
      • The proportion of liquid assets held by HNW individuals increased by 1.5pp in 2017
        • Table Figure 2: Affluent individuals account for 94% of total liquid assets
      • A fifth of HNWs' investable portfolio is held in illiquid assets
        • Table Figure 3: Commodities are forecast to have the highest increase in demand in terms of HNW asset allocation
    • Offshore investments now account for 30% of Swiss HNW assets
      • Geographic diversification leads Swiss residents to invest offshore
      • Exchange rate fluctuations should encourage wealth repatriation
        • Table Figure 4: Offshore investments by Swiss residents are above average
      • Switzerland introduced non-punishable voluntary disclosure for tax evaders
  • Deposits Constitute Over Half of Liquid Wealth in Switzerland
    • Introduction
    • Deposits will slow in growth but continue to contribute the most
      • Table Figure 5: Deposits continue to dominate, although growth has slowed
      • Negative interest rates and stock market downturn will mute future growth
        • Table Figure 6: Bonds are the only asset class to have decreased
    • Mutual funds and equities drive the growth of the retail savings and investments market
      • The SMI is dominated by consumer goods and healthcare
        • Table Figure 7: The healthcare sector has the largest stock market weighting
      • Equity investors remain prudent in times of growth
        • Table Figure 8: Stock market performance boosted equities in 2017
      • Mutual funds growth exceeds other asset classes
        • Table Figure 9: Mutual funds recorded the highest growth in 2017
    • Deposits experience steady but slow growth
      • Flows from the equity market offset the impact of negative interest rates on deposit growth
        • Table Figure 10: Growth slowed down in 2017 for deposits, and the outlook is poor
    • Bonds have experienced outflows since 2010
      • Negative interest rates continue to reduce appetite for bonds
      • The unstable European outlook reduces the chance of interest rate change
        • Table Figure 11: Appetite for bonds continues to fall
  • Switzerland Has Been Losing its Appeal as an Offshore Center
    • Introduction
    • Various initiatives and scandals affect the Swiss non-resident market
      • Switzerland agreed to automatic exchange of tax information
        • Table Figure 12: Switzerland has adopted the OECD's CRS
      • The appeal of Swiss banks is declining
    • The majority of retail non-resident assets are held in equities and mutual funds
      • Stock market performance in 2017 encouraged the resurgence of non-resident investors
        • Table Figure 13: Equities and mutual funds saw the largest growth among non-resident retail investors
  • Appendix
    • Abbreviations and acronyms
    • Supplementary data
      • Table Number of adults in Switzerland segmented by asset band (000s), 2006–11
      • Table Number of adults in Switzerland segmented by asset band (000s), 2012–17
      • Table Number of adults in Switzerland segmented by asset band (000s), 2018f–22f
      • Table Retail liquid assets in Switzerland segmented by asset band ($m), 2006–11
      • Table Retail liquid assets in Switzerland segmented by asset band ($m), 2012–17
      • Table Retail liquid assets in Switzerland segmented by asset band ($m), 2018f–22f
    • Definitions
      • Affluent
      • Domicile
      • Double taxation convention
      • Emerging affluent
      • FATCA
      • HNW
      • Individual
      • Liquid assets
      • Mass affluent
      • Mass market
      • Onshore
      • Residency
      • Exchange of information
      • TIEAs
    • Methodology
      • 2018 Global Wealth Managers Survey
      • Retail Investments Analytics
        • Table Figure 14: Example of a four-input forecasting process
      • Global Wealth Model
      • Exchange rates
        • Table US dollar exchange rates with the Swiss franc
    • Bibliography
    • Further reading
    • About GlobalData
      • Table Figure 15: About GlobalData

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