The conditions for asset management in Switzerland are clearly regulated – specific requirements apply to both the investing party and the offering party to ensure security, transparency and trust.
Particularly in a complex investment environment such as today's, it is crucial to know the conditions under which asset management in Switzerland is sensible, accessible and regulated. Because only those who know the framework conditions can make well-founded decisions – be it when selecting the right asset manager or when assessing their own requirements as an investor.
Why is Switzerland an attractive location for wealth management?
Swiss franc as a 'safe haven'
Switzerland has been regarded as a reliable financial center for decades. Whether during the global financial crisis in 2008, during the coronavirus pandemic or in the face of geopolitical tensions – the Swiss franc has remained stable and confidence in the location has remained unbroken. The fact that Switzerland operates independently of EU structures and at the same time has close economic ties offers investors a real advantage: predictability, protection and autonomy.
|
Year |
Global crisis |
Exchange rate CHF/EUR* |
|
2008 |
Financial crisis |
approx. 1.60 → 1.45 |
|
2010-2012 |
Euro crisis |
approx. 1.45 → 1.20 |
|
2015 |
Abolition of the EUR minimum exchange rate |
1.20 → 0.98 |
|
2020 |
Corona pandemic |
stable around 1.06-1.08 |
|
2022 |
Ukraine war, energy crisis |
further to approx. 0.96 |
Reputation of the Swiss financial center
Discretion, efficiency and quality – these are the characteristics that have always characterized the Swiss financial centre. Many international investors see Switzerland as a neutral business location and a place for
Trust & discretion as location advantages
Confidentiality is a tradition in Switzerland – as is the close and personal relationship between client and manager. Asset management in Switzerland deliberately focuses on individuality and reliability, especially in view of the advancing digitalization. For investors, this means that their assets are both securely invested and managed with personal care.
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What are the requirements for (international) investors?
Asset management in Switzerland is aimed at investors who are looking for professional, individual support – and are prepared to meet certain formal, legal and financial requirements. The advantages are obvious: individual investment strategies, systematic risk management and time savings. But not everyone can or should go down this route.
Personal & legal requirements
Anyone wishing to invest their money in Switzerland must prove their identity and guarantee financial transparency. Swiss standards are high – not only to protect investors, but also to combat money laundering.
- Proof of identity (KYC 'Know Your Customer'): The presentation of a valid identity document is mandatory.
- Proof of the origin of the funds (proof of funds): The origin of the funds must be disclosed (e.g. salary, inheritance, sale of company).
- Tax compliance: The investor must be tax-compliant – automatic reporting to the country of residence can take place within the framework of international agreements (e.g. AEOI).
Contractual requirements
Cooperation with a Swiss asset management company requires formal foundations:
- Asset management contract: Written contract with details of objectives, fees, obligations and rights.
- Consent to general terms and conditions: The general terms and conditions of the provider must be accepted.
Tax & reporting obligations in the country of origin
Even if the management takes place in Switzerland – the tax responsibility remains with the investor:
- Personal responsibility: Investment income must be declared correctly in the country of origin.
- Automatic exchange of information (AEOI): Swiss financial institutions automatically report relevant account data to the authorities in the investor's country of residence, provided a corresponding agreement exists.
Requirements for asset managers: regulatory requirements in Switzerland
Since the introduction of the Financial Institutions Act (FinIA) in 2020, the activities of asset managers in Switzerland have been subject to clearly regulated supervision. The aim: greater professionalism, more transparency and increased investor confidence. Anyone wishing to operate as an asset manager in Switzerland today must meet extensive organizational, legal and personnel requirements.
FINMA authorization requirement since 2020
Since the FinIA came into force, all asset managers in Switzerland have been subject to licensing – the financial market supervisory authority FINMA is responsible. This ended a long transitional period during which many independent managers were not subject to comprehensive supervision.
- Prerequisite: Registration and authorization by FINMA
- Content of the authorization: Review of organization, capital, management and control mechanisms
- Objective: to protect investors and ensure professional standards
- Transition periods: For existing administrators, there was a transition period until the end of 2022 to submit all documents
Organizational & financial requirements
Asset management requires specialist knowledge and a functioning infrastructure:
- Domicile in Switzerland: The operational activity must be based in Switzerland
- Appropriate organization: clear structures, documentation, compliance processes
- Minimum capital requirement: Depending on the business model, e.g. CHF 100,000 to 200,000 in own funds
- Professional liability insurance: as protection against possible claims in the customer business
Requirements for the management
Persons who manage assets in Switzerland are subject to strict regulatory requirements. According to FinIA, they must have demonstrable professional qualifications – for example through training and experience in the areas of asset management, financial analysis and risk management. They must also have an impeccable reputation. This means: no relevant criminal convictions or ongoing proceedings in Switzerland or abroad.
Furthermore, the supervisory authority expects the management to guarantee the proper, continuous management of the company at all times. This ensures that the interests of investors are represented professionally and responsibly at all times.
As an investor, you issue a power of attorney to your asset manager so that they can make investment decisions for you. They not only invest your money, but also monitor and manage it. However, they do not have a completely free hand. You certainly have the option of specifying certain framework conditions.
Asset management is rather unusual for small investors. Some banks do offer standardized asset management starting at CHF 50,000 or EUR 50,000. As a rule, however, the usual minimum investment amounts for individual asset management mandates are CHF 500,000 in Switzerland and EUR 250,000 in Germany.
What makes a competent and trustworthy asset manager?
Have you decided not to hoard your assets in a savings account, but to invest them in the stock market? Then a financial partner you can trust is worth its weight in gold. How do you find an ideal partner? We have compiled seven important selection criteria for a competent asset manager for you:
1. investment strategy
Take enough time to get to know different asset managers and listen carefully to the investment strategies they recommend. A good strategy is comprehensible, customized and cost-efficient to implement. Ideally, you will also gain an insight into historical projections to get a better feel for possible developments.
Ask questions – and observe how openly your counterpart deals with them. A professional asset manager will explain to you transparently how your money is invested, which contracts are concluded and what risks exist. You will not be pressured into risky investments, but your security needs and gut feeling will be taken into account.
If you have to make a decision, listen to your gut feeling and ask yourself the following questions:
- Do I feel that I am in good hands and taken seriously?
- Is the strategy explained to me clearly?
- Does the communication remain respectful even in the event of critical queries?
- Do I have the feeling that my assets are in good hands here?
A trusting relationship begins with transparency, patience and a willingness to respond to your questions.
2. cost transparency
It goes without saying that making investments is not completely free of charge. But what exactly are the costs associated with implementing the chosen investment solution? It must be possible to provide a detailed overview of costs at this point. In addition to bank charges, transaction costs, taxes, duties and administration costs should also be taken into account. Although the costs are not the decisive element for a successful investment, they can still eat up a significant part of the return.
3. active management
The stock market is an incredibly active place. There is almost constant movement and if you want to make the most of your investments, you have to stay on the ball. However, few people have the time or inclination to observe the market day and night and interpret when action is required.
The asset manager must actively manage the investments and constantly adapt to new market conditions. If, on the other hand, they rely on a simple 'buy and hold' strategy and otherwise lean back, then you are much better off with a different management company. You should therefore critically scrutinize how the asset management company selects investments and how this is monitored.
4th Independence
You should be wary if the asset manager is employed by a bank. Logically, banks earn more if the assets under management flow into their own products. If the person employed there then also receives a bonus for this, the question arises as to what interests are being served. For sustainable success, it is important that investment decisions can be made completely independently. Asset management has the task of buying the best possible products to implement the chosen investment strategy – regardless of whether they are its own products or not.
5. reporting
The asset manager wants to fob you off with mere bank statements? No, thank you! Agree in advance that you will receive regular detailed reports on your investments. This should be at least once a year, but ideally quarterly. The report should definitely show what results your asset manager has achieved in the past period and which positions are in your portfolio. Are the positions in line with your chosen investment strategy?
6. personal advice & support
Do you feel uncomfortable right from the start and have the impression that the investment expert is not listening to you at all? Then keep looking around. Trust is the be-all and end-all when it comes to portfolio advice, because you need a personal contact at your side who will listen to you. Issues should be explained in such a way that even laypeople can easily understand them. Caution is advised if the other person repeatedly uses technical terms that you can't understand or responds to your questions with: 'That's too complicated to explain in a few words'.
7. past performance
It makes sense to consider the reviews of other customers. What experiences have they already had? Caution is advised here, as not all reviews may be genuine, but they often provide important information.
You can also find out about the performance of recent years. What returns has asset management achieved for its clients in recent years? A great performance in the past is no guarantee for the future, but it is at least an indication of the investment quality.
Also pay attention to the returns you are promised on shares. On average, you can expect a net return of around 6% over the long term with well-diversified investments in quality shares. An asset manager who promises you significantly more is either taking very high risks or trying to lure you in with promises of high returns.
How to find the right wealth management company in Switzerland
Asset management in Switzerland is characterized by stable framework conditions, a strong regulatory environment and a high degree of professionalism. If you want to structure your assets strategically and develop them over the long term, you should be aware of the requirements on the investor and provider side.
Arrange a no-obligation consultation now and create a sound basis for your personal wealth strategy based on wealth management in Switzerland with all its prerequisites.
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