François Mollat du Jourdin (MJ & Cie): “Swiss wealth management provides access to more international investment solutions”

Leaders League: Can you explain what wealth management in Switzerland involves and how it differs from the practice in France?

François Mollat du Jourdin: The financial sector, which takes care of the bulk of with wealth management, accounts for nearly 10% of GDP in Switzerland, compared to 4.5% in France. The total bank balance-sheets amount to five times the GDP, more than triple the European average. The sector employs more than 200,000 people, nearly 5% of the workforce. Globally, Switzerland has historically held the top spot in international wealth management. 

Private banks play a central role; wealth management is in the DNA of most of them, as indeed it is in commercial banks. The number of banks dedicated solely to wealth management in Switzerland is unrivalled anywhere. Some have reached significant stature and they have been woven into the fabric of the local landscape for over two centuries!

Wealth managers, also known as asset managers, occupy a key role as well, due to their position halfway between an asset management company and a financial investment advisor, which does not exist in Switzerland. Private banks and wealth managers share the market in a way that quite avoids direct competition. Essentially, wealth management involves offering discretionary portfolio management, allowing access to broader, deeper and more international investment solutions.  

What are the main current trends in Swiss wealth management?
We are witnessing a rise in asset management within banks, and relatively few independent players emerging. Several institutions have managed to position themselves in niches of excellence, both in Switzerland and internationally, whether it’s thematic management, in the case of Pictet, SRI for Lombard Odier, or alternative management at UBP, etc. What’s more, the professionalization of wealth managers, in addition to digital transformation remain major topics. Finally, the offering is becoming more international with accounts and mandates in Asia, the Luxembourg FID, and French-style tax reports.

How does the Swiss regulatory framework influence wealth management there?
The evolution of Swiss regulations is similar to what’s been taking place in France and, more broadly, all across Europe, albeit with a few years’ delay and generally a more pragmatic application. This has accelerated the professionalization of the sector. However, we have not yet seen a significant concentration like that which has affected financial investment advisors in France. As for compensation, management fees and rebates, they still lack transparency, even though regulations addressing these topics are evolving. A strong culture of confidentiality persists in Switzerland, even though the country has given up bank secrecy.

What specific strategies, services or products do you use to manage your clients’ wealth in Switzerland?
Swiss management allows the prospective client to diversifying their methods of wealth management and locate assets outside of the eurozone. Management mandates, including on alternative assets, constitute the flagship offer, especially as managers have more flexibility. They provide broader exposure to Swiss currencies and assets. Finally, access to international private asset platforms is significant.

Gold remains a ubiquitous asset in portfolios. Alternative products, such as private equity or hedge funds, are generally sourced beyond our borders, thanks to a very open architecture towards the rest of Europe, but also to the United States and Asia. In terms of SRI, Swiss banks often have a more advanced and structured approach.

Over thirty years, Switzerland has staved off competition, notably from Hong Kong, Singapore and Dubai, become one of the most competitive players in wealth management.