New data on Swiss wealth management / wages in Switzerland

Still on the lead

Deloitte Wealth Management Centre Ranking was published on Friday, May 11th. Switzerland remained at the lead with total of 1.84 trillion dollars (CHF 1.85 billion) of international assets managed in the country at the end of 2017. Though, it is still the biggest wealth management hub in the world, assets managed have been gradually reduced in last year. The amount managed at the end of 2017 is 7% lower than in 2010, that means on average, each year 1% of international assets vanishes from Switzerland. Where do investors locate their wealth? Maybe they sell Swiss Francs and instead buy dollars or British pounds denominating their wealth in these currencies and storing it in the US or the UK, the second and the third countries in the ranking. United Kingdom has 1.79 trillion dollars under management, whereas the United States – 1.48 trillion dollars. Both numbers are significantly higher than in previous seven years. Wealth managed in the UK rose by 9%, whereas in the US by whooping 48%. The rest of the world can’t compete with these three hubs. In total they make up for 60% of global international market volume. It is worth noticing though, that Asia seems to step up its game with Hong Kong gaining enormous amount of 122% in managed assets and Singapore’s international wealth rising by 12%.

The most performative and competitive

Switzerland is in the first place when it comes to performance and competitiveness, according to Deloitte’s ranking.  The country can boast of high political stability and relatively stable economy which influence its status as the number one wealth management hub in the world. Singapore has similar good conditions, but Switzerland is better than Asian country in terms of quality of provided services and so called digital maturity. International investors are keen to put their money where digital tools are available together with excellent advisory services. Still, low taxes and favorable law regulations are a must, but treated more like something obligatory for countries aspiring to be wealth management centers. In that case, easy access to digital solutions and professional support of advisors makes the difference.

The future looks blank?

Even though Switzerland is at the lead, the race is getting tighter as competitors accumulate more and more wealth from foreign investors and Switzerland on the contrary. The gap between Switzerland and the second in UK has shrunk in last seven years. What is more the ambient is not good for putting money abroad at all. Generally, the market volume of the world’s wealth management center has fallen by 1% since 2010, even though the volume of global wealth has risen by one third. The problem is that wealth investors prefer now real estate investment or asset instrument instead of financial instruments or buy Swiss Francs, Euros or other currencies. As the Swiss market boom cycle will soon come to an end, the country will have further problem to attract investors. Switzerland found it hard recently to accumulate new money, as its balance was negative at the end of 2017, as per Deloitte.

At least wages are doing good

If wealth management data can seem troubling for Switzerland, the consolation can be found in wages survey, published by the government on Monday, May 14th. Economy is doing good if wages are on the rise, as it is the case in Switzerland. In 2016 salary for full-time job was CHF 6,502 for the whole Swiss economy. The 10% of the best paid earned monthly CHF 11,406, up 6.3% compared to 2008. The lowest-paid 10% got CHF 4,313 per month, a 9.9% more than in 2008, whereas salaries for middle-income employees increase by 6.9% from 2008.

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