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Wealth in Switzerland: Sizing the Market Opportunity

  • ID: 4661872
  • Report
  • Region: Switzerland
  • 42 pages
  • GlobalData
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FEATURED COMPANIES

  • Credit Suisse
  • Nestle
  • Novartis
  • Roche Holdings
  • UBS
  • Zurich Insurance Group
  • MORE
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 the author’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.
Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Credit Suisse
  • Nestle
  • Novartis
  • Roche Holdings
  • UBS
  • Zurich Insurance Group
  • MORE
1. EXECUTIVE SUMMARY
1.1. Economic factors influenced slow Swiss wealth market growth
1.2. Key findings
1.3. Critical success factors

2. THE SWISS WEALTH MARKET EXPANDED ONLY SLIGHTLY IN 2017 DUE TO SLOW ECONOMIC GROWTH
2.1. Introduction
2.2. Growth will slow down in future years
2.2.1. 2017 saw slow yet positive growth in the Swiss economy
2.2.2. HNW individuals account for 2% of the population
2.2.3. The proportion of liquid assets held by HNW individuals increased by 1.5pp in 2017
2.2.4. A fifth of HNWs’ investable portfolio is held in illiquid assets
2.3. Offshore investments now account for 30% of Swiss HNW assets
2.3.1. Geographic diversification leads Swiss residents to invest offshore
2.3.2. Exchange rate fluctuations should encourage wealth repatriation
2.3.3. Switzerland introduced non-punishable voluntary disclosure for tax evaders

3. DEPOSITS CONSTITUTE OVER HALF OF LIQUID WEALTH IN SWITZERLAND
3.1. Introduction
3.2. Deposits will slow in growth but continue to contribute the most
3.2.1. Negative interest rates and stock market downturn will mute future growth
3.3. Mutual funds and equities drive the growth of the retail savings and investments market
3.3.1. The SMI is dominated by consumer goods and healthcare
3.3.2. Equity investors remain prudent in times of growth
3.3.3. Mutual funds growth exceeds other asset classes
3.4. Deposits experience steady but slow growth
3.4.1. Flows from the equity market offset the impact of negative interest rates on deposit growth
3.5. Bonds have experienced outflows since 2010
3.5.1. Negative interest rates continue to reduce appetite for bonds
3.5.2. The unstable European outlook reduces the chance of interest rate change

4. SWITZERLAND HAS BEEN LOSING ITS APPEAL AS AN OFFSHORE CENTER
4.1. Introduction
4.2. Various initiatives and scandals affect the Swiss non-resident market
4.2.1. Switzerland agreed to automatic exchange of tax information
4.2.2. The appeal of Swiss banks is declining
4.3. The majority of retail non-resident assets are held in equities and mutual funds
4.3.1. Stock market performance in 2017 encouraged the resurgence of non-resident investors

5. APPENDIX
5.1. Abbreviations and acronyms
5.2. Supplementary data
5.3. Definitions
5.3.1. Affluent
5.3.2. Domicile
5.3.3. Double taxation convention
5.3.4. Emerging affluent
5.3.5. FATCA
5.3.6. HNW
5.3.7. Individual
5.3.8. Liquid assets
5.3.9. Mass affluent
5.3.10. Mass market
5.3.11. Onshore
5.3.12. Residency
5.3.13. Exchange of information
5.3.14. TIEAs
5.4. Methodology
5.4.1. 2018 Global Wealth Managers Survey
5.4.2. Retail Investments Analytics
5.4.3. Global Wealth Model
5.4.4. Exchange rates
5.5. Bibliography
5.6. Further reading

List of Tables
Table 1: Number of adults in Switzerland segmented by asset band (000s), 2006-11
Table 2: Number of adults in Switzerland segmented by asset band (000s), 2012-17
Table 3: Number of adults in Switzerland segmented by asset band (000s), 2018f-22f
Table 4: Retail liquid assets in Switzerland segmented by asset band ($m), 2006-11
Table 5: Retail liquid assets in Switzerland segmented by asset band ($m), 2012-17
Table 6: Retail liquid assets in Switzerland segmented by asset band ($m), 2018f-22f
Table 7: US dollar exchange rates with the Swiss franc

List of Figures
Figure 1: 71% of the Swiss population is affluent
Figure 2: Affluent individuals account for 94% of total liquid assets
Figure 3: Commodities are forecast to have the highest increase in demand in terms of HNW asset allocation
Figure 4: Offshore investments by Swiss residents are above average
Figure 5: Deposits continue to dominate, although growth has slowed
Figure 6: Bonds are the only asset class to have decreased
Figure 7: The healthcare sector has the largest stock market weighting
Figure 8: Stock market performance boosted equities in 2017
Figure 9: Mutual funds recorded the highest growth in 2017
Figure 10: Growth slowed down in 2017 for deposits, and the outlook is poor
Figure 11: Appetite for bonds continues to fall
Figure 12: Switzerland has adopted the OECD’s CRS
Figure 13: Equities and mutual funds saw the largest growth among non-resident retail investors
Figure 14: Example of a four-input forecasting process 38
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  • UBS
  • Credit Suisse
  • Zurich Insurance Group
  • Novartis
  • Roche Holdings
  • Nestle
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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