Switzerland is the world leader in private wealth management. Despite fierce competition from financial hubs such as Singapore and Hongkong, Switzerland has been defending its pole position successfully since years.
Although the AuM is expected to keep growing until 2025, the revenue generated from it is expected to decrease. Due to the fundamental changes in the Swiss Wealth Management industry (regulatory changes, consolidation, changing investor expectations, etc.), EAM margins are going to be under more and more pressure.
WealthArc is at the forefront of innovation and change in the Swiss wealth management industry. We strive to provide intelligence and thought leadership to Swiss EAMs. In our latest report Wealth Management Fees under Pressure, we shed light on the different fee levels applied by EAMs, a topic that has received little to no attention in the past years. We then draft different strategies for overcomin the margin squeeze expected to be a major challenge for wealth management professionals.
Our report answers the questions commonly asked in the wealth management environment:
Our analysis of Swiss EAMs reveals the following trends in the Swiss EAM industry:
Swiss wealth management professionals build on expertise and trust in the advisory process. But with the increasing investor and regulatory scrutiny, advisors are forced to find ways to innovate their operating model.
How can EAMs justify their fee level or even increase it?
The hybrid advisory revolution is already happening in the wealth management industry. Technology-enabled advisors automate many time-consuming and cumbersome tasks through digital platforms such as WealthArc. This allows advisors to fully dedicate their time to what matters most, namely building relationships with their clients and the markets.
Having quick access to all financial and sensitive client information within a single platform not only improves efficiency but also team satisfaction.
The pandemic has accelerated the shift towards digital channels. Those wealth management professionals who already communicate seamlessly through online channels provide better investor experience. As Refinitiv (LSEG) has recently said, we can observe a “race for digital differentiation”.
With the fees they pay, investors expect premium experience. 80% of them would like to see dynamic content integrated into their digital experience with wealth management advisors.
Trust is the most important currency in the investor-advisor relationship. But the majority of investors have low awareness and understanding of the wealth management fees that they pay. Therefore, EAMs should develop transparent pricing models: understandable and fair for their clients.
Some of the advisors we interviewed admitted that they openly tell their investors about their fee structure, operating cost and advisor compensation.
To ensure profitability and face the new reality of sustained fee pressure and regulatory scrutiny, many wealth management professionals have initiated the transformation of their operating model by integrating a single technology platform such as WealthArc.
To discover all the insights from our wealth management fees study, download the full report: