Published : Oct-2018
No. of Pages : 42
1. EXECUTIVE SUMMARY2
1.1. Economic factors influenced slow Swiss wealth market growth 2
1.2. Key findings 2
1.3. Critical success factors 2
2. THE SWISS WEALTH MARKET EXPANDED ONLY SLIGHTLY IN 2017 DUE TO SLOW ECONOMIC GROWTH 8
2.1. Introduction 8
2.2. Growth will slow down in future years 8
2.2.1. 2017 saw slow yet positive growth in the Swiss economy 8
2.2.2. HNW individuals account for 2% of the population 9
2.2.3. The proportion of liquid assets held by HNW individuals increased by 1.5pp in 2017 9
2.2.4. A fifth of HNWs' investable portfolio is held in illiquid assets 10
2.3. Offshore investments now account for 30% of Swiss HNW assets 11
2.3.1. Geographic diversification leads Swiss residents to invest offshore 11
2.3.2. Exchange rate fluctuations should encourage wealth repatriation 12
2.3.3. Switzerland introduced non-punishable voluntary disclosure for tax evaders 13
3. DEPOSITS CONSTITUTE OVER HALF OF LIQUID WEALTH IN SWITZERLAND 14
3.1. Introduction 14
3.2. Deposits will slow in growth but continue to contribute the most 14
3.2.1. Negative interest rates and stock market downturn will mute future growth 15
3.3. Mutual funds and equities drive the growth of the retail savings and investments market 16
3.3.1. The SMI is dominated by consumer goods and healthcare 16
3.3.2. Equity investors remain prudent in times of growth 17
3.3.3. Mutual funds growth exceeds other asset classes 18
3.4. Deposits experience steady but slow growth 19
3.4.1. Flows from the equity market offset the impact of negative interest rates on deposit growth 19
3.5. Bonds have experienced outflows since 2010 20
3.5.1. Negative interest rates continue to reduce appetite for bonds 20
3.5.2. The unstable European outlook reduces the chance of interest rate change 20
4. SWITZERLAND HAS BEEN LOSING ITS APPEAL AS AN OFFSHORE CENTER22
4.1. Introduction 22
4.2. Various initiatives and scandals affect the Swiss non-resident market 22
4.2.1. Switzerland agreed to automatic exchange of tax information 22
4.2.2. The appeal of Swiss banks is declining 23
4.3. The majority of retail non-resident assets are held in equities and mutual funds 24
4.3.1. Stock market performance in 2017 encouraged the resurgence of non-resident investors 24
5. APPENDIX26
5.1. Abbreviations and acronyms 26
5.2. Supplementary data 27
5.3. Definitions 32
5.3.1. Affluent 32
5.3.2. Domicile 33
5.3.3. Double taxation convention 33
5.3.4. Emerging affluent 33
5.3.5. FATCA 33
5.3.6. HNW 33
5.3.7. Individual 33
5.3.8. Liquid assets 34
5.3.9. Mass affluent 34
5.3.10. Mass market 34
5.3.11. Onshore 35
5.3.12. Residency 35
5.3.13. Exchange of information 35
5.3.14. TIEAs 36
5.4. Methodology 36
5.4.1. 2018 Global Wealth Managers Survey 36
5.4.2. Retail Investments Analytics 36
5.4.3. Global Wealth Model 38
5.4.4. Exchange rates 39
5.5. Bibliography 40
5.6. Further reading 40
List of Tables
Table 1: Number of adults in Switzerland segmented by asset band (000s), 2006-11 27
Table 2: Number of adults in Switzerland segmented by asset band (000s), 2012-17 28
Table 3: Number of adults in Switzerland segmented by asset band (000s), 2018f-22f 29
Table 4: Retail liquid assets in Switzerland segmented by asset band ($m), 2006-11 30
Table 5: Retail liquid assets in Switzerland segmented by asset band ($m), 2012-17 31
Table 6: Retail liquid assets in Switzerland segmented by asset band ($m), 2018f-22f 32
Table 7: US dollar exchange rates with the Swiss franc 40
List of Figures
Figure 1: 71% of the Swiss population is affluent 9
Figure 2: Affluent individuals account for 94% of total liquid assets 10
Figure 3: Commodities are forecast to have the highest increase in demand in terms of HNW asset allocation 11
Figure 4: Offshore investments by Swiss residents are above average 12
Figure 5: Deposits continue to dominate, although growth has slowed 15
Figure 6: Bonds are the only asset class to have decreased 16
Figure 7: The healthcare sector has the largest stock market weighting 17
Figure 8: Stock market performance boosted equities in 2017 18
Figure 9: Mutual funds recorded the highest growth in 2017 19
Figure 10: Growth slowed down in 2017 for deposits, and the outlook is poor 20
Figure 11: Appetite for bonds continues to fall 21
Figure 12: Switzerland has adopted the OECD's CRS 23
Figure 13: Equities and mutual funds saw the largest growth among non-resident retail investors 25
Figure 14: Example of a four-input forecasting process 38
