Switzerland's Declining Appeal for Wealthy Clients

ZURICH (Reuters) – Switzerland is becoming less attractive to wealthy clients, with a decline in assets managed by the country's banks and financial advisers, according to a study published on Wednesday.

Key Findings

• Foreign assets under management fell to $2.174 trillion in 2023 from $2.624 trillion in 2020, as revealed by a study by consultants Deloitte.
• The 2022 crash of Credit Suisse has shaken the confidence of wealthy clients from Europe and the Middle East, leading to doubts about the stability of the Swiss banking sector.
• Asset flows from both regions have declined since last year’s crisis and have not fully recovered.
• Advantages like low taxes, legal certainty, and neutrality have become less significant.

Despite retaining its position as the largest location for offshore wealth, Switzerland's share of the estimated $10 trillion in offshore managed wealth dropped to 21.4% from 23.7% in 2020.

Comparative Analysis

• Competitors are closing the gap:
  • Britain: $2.166 trillion in foreign assets
  • United States: $2.109 trillion in foreign assets
  • Hong Kong and Singapore also rank in the global top five, but Singapore is under pressure due to declining assets.

United States Advantage

“The United States is in a strong starting position,” said Patrik Spiller, who leads Deloitte's wealth management industry practice in Switzerland. The U.S. benefits from a high quality of asset managers, a robust capital market, regulatory and tax advantages, and does not engage in automatic information exchange aimed at preventing cross-border tax evasion, providing it an edge over other financial centers.