SWITZERLAND: Still the leading wealth management centre, but rivals pile on pressure
Switzerland remains the world’s largest wealth management centre for international assets, but the air is getting thinner at the top and other financial hubs are gaining ground, according to a global report.
A total of $1.84 trillion (CHF1.85 billion) of international assets were managed in Switzerland at the end of 2017, says the latest Deloitte Wealth Management Centre Rankingexternal link, published on Friday. This is around 7% less than in 2010.
Britain ($1.79 trillion) and the United States ($1.48 trillion) follow closely behind. Both countries have significantly increased their international market volume in the past seven years, by 9% and 48% respectively.
The three largest international wealth management centres manage around 60% of the total international market volume. However, Asian financial centres such as Hong Kong (+122%) and Singapore (+12%) are emerging as increasingly important players in the international wealth management market.
Deloitte also puts Switzerland at the top when it comes to competitiveness and performance. The Swiss wealth management hub benefits from high political and economic stability, as does Singapore, the authors write. However, Switzerland outperforms Singapore in terms of provider capability, especially service quality and digital maturity.
Switzerland continues to have a competitive edge thanks to the digital skills of its workforce, its longstanding know-how in serving international clientele and customer-oriented approach, according to the report.
“When it comes to choosing a location to invest their assets, today’s international wealth management clients are looking for excellent service, which includes digital tools, and a top-notch advisory experience. Tax and regulatory conditions are still important, but more as a standard that financial hubs are expected to fulfil,” said Daniel Kobler, who leads Deloitte’s Private Banking & Wealth Management Industry in Switzerland.
“Switzerland is still the go-to place for first-rate client experience, which is why we can be confident about the future of the Swiss wealth management hub. Swiss banks have done their homework well in the last couple of years, and even got their relatively high costs under control, increasing their cost-to-income ratios and profitability.”
However, Kobler cautioned that Swiss wealth managers were still struggling to attract new assets and to transform their traditional business model by significantly investing in innovation and improving customer experience.