In the evolving world of wealth management, the debate between Registered Investment Advisors (RIAs) and private banks is gaining global attention. While RIAs have flourished in the United States, offering independent, transparent, and fiduciary-based client service, private banks—particularly in Switzerland—maintain prestige through tradition, discretion, and deep-rooted client relationships. But what if these aren’t mutually exclusive models? This article examines how Swiss External Asset Managers (EAMs) provide a compelling hybrid.
Understanding the RIA Model
RIAs in the United States operate under SEC oversight and are legally bound to act in the client’s best interest. Their business model emphasises fee transparency, independence, and scalability. Supported by sophisticated CRM systems and standardised compliance frameworks, RIAs have rapidly consolidated, with private equity fueling growth through M&A activity. Client segmentation and digital onboarding are standard practices in the industry.
Private Banks: Global Legacy and Perception
Private banks, particularly in Switzerland, have historically catered to high-net-worth individuals (HNWIs) with bespoke services, concierge-level discretion, and a relationship-driven culture. Unlike RIAs, they may operate under a suitability standard rather than a fiduciary one. Private banks often bundle investment management, lending, and estate planning into a single, all-encompassing offering.
Swiss EAMs: A Hidden Third Player
What many outside Switzerland don’t realise is that Swiss External Asset Managers (EAMs) offer a unique model—combining the independence of RIAs with the custodial infrastructure of private banks. EAMs manage client assets held at custodian banks (e.g., Vontobel, Julius Baer), maintaining autonomy while offering global reach and personal service. They’re subject to FINMA regulation under LSFin and LEFin, ensuring professionalism and compliance without the PE-driven consolidation seen in the US.
Succession and Ownership Mindsets
RIAs are often built to sell—succession planning is monetised via private equity, with EBITDA multiples driving valuations. In contrast, Swiss EAMs and family-run private banks focus on long-term stewardship. Client relationships are often passed down through generations, and exit strategies remain bespoke and succession-driven, rather than being dictated by investor returns.
Client Experience: Digital vs. Personal
US RIAs prioritise efficiency—leveraging automation and centralised platforms. Swiss private banks and EAMs offer a slower, more intentional client journey. Trust is built over time, sometimes without a formal pitch deck. This personalised experience is still highly valued by many UHNWIs worldwide.
Regulatory Nuance
RIAs operate within a scalable regulatory regime, while Swiss firms navigate multilingual compliance obligations and a more fragmented regulatory landscape. Still, Swiss regulation is tightening, driving higher standards across the board for EAMs and private banks alike.
Lessons for Both Worlds
- RIAs can adopt the Swiss emphasis on discretion, continuity, and loyalty.
- Private banks and EAMs can learn from the US’s digitalisation, succession planning, liquidity strategies, and branding approaches.
Outbound Insight
According to the CFA Institute, global investor expectations are changing fast. As a result, the private wealth landscape is undergoing a shift. Investors now demand more transparency, better ESG integration, and easier digital access. These changes affect both US-based RIAs and Swiss private institutions alike.
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Conclusion
The debate between RIAs and private banks is not just a US concern. Instead, it provides a clear view into how independence, regulation, succession, and client experience unfold across different markets. In this context, Swiss EAMs quietly introduce a strong third option. They are independent, relationship-driven, and globally connected. As global wealth management continues to shift, firms that combine the strengths of both systems may lead the future of private finance.
