This news service recently spoke to a figure in Switzerland’s independent wealth management sector about the impact of new regulations introduced half a decade ago, how such firms can stand out, and what the future holds.
When a recent Swiss report found that a quarter of the country’s external asset managers were not planning to invest in technology, and evidence of a quiet exodus of some EAMs emerged, it’s time to take stock of an industry undergoing significant change.
The findings, which came from Swiss Independent Wealth Management on 30 April, prompted WealthBriefing to ask a prominent figure in the sector, Patrick Stauber, group CEO at Marcuard Heritage, to explain what he thinks is happening. He said his views were not necessarily those of his firm.
“That [25 per cent] figure is largely a demographic statement, not a strategic one. Roughly two-thirds of decision-makers in our sector are over 51, and well over half haven’t sorted succession. If you plan to wind down in five years, you milk the book rather than reinvest in it. That is rational behaviour, not strategic apathy,” Stauber said.
Beyond the chatbot hype
“The more interesting question is what the other 75 per cent are doing. AI tops the list, but the deep dive shows the dominant use case is chatbots, with a meaningful share of respondents still unable to say what they actually intend to do with the tool. That is exploration, not transformation. The harder work – proper CRM (client relationship management) and PMS (portfolio management services) integration, decent data foundations, multi-bank consolidated reporting that works – attracts far less attention than the buzzword.
“The firms that will look good in five years are the ones quietly building infrastructure now while everyone else talks about agents,” he said.
A tighter regulatory framework
A new regulatory system on EAMs took effect at the start of 2020. The new rules impose fresh reporting and governance requirements. They aim to raise investor protection and remove risks to the wider financial system. Industry observers already cite the changes as a driver of consolidation in the EAM sector. Breakaway teams from banks have often founded EAMs. According to WealthSummit, the platform that hosts conferences and issues reports, between a third and a half of all independent asset managers in Switzerland have disappeared in the past five years.
Six years ago, several Swiss federal acts introduced a new licensing regime for these institutions, alongside standards for reporting and disclosure. The Financial Services Act (FinSA) and the Financial Institutions Act (FinIA) came into force at the start of 2020. In a report on 11 March, FINMA, the Swiss regulator, stated that portfolio managers and trustees now need a FINMA licence to conduct commercial business. FINMA gave existing institutions a three-year transitional period. The regulator received 1,699 applications by the end of 2022. By the end of February 2025, FINMA had processed more than 94 per cent of them.
For those organisations outside Switzerland, the consolidation is not a surprise. While a different business model, UK-based independent investment advisors went through a similar process after the 2013 Retail Distribution Review reforms to financial advice. Some firms hiked their investment minimums, or sold up, aggregated alongside others, or were taken over.
M&A: an overstated force
WealthBriefing asked Stauber about this process, including the importance of M&A deals.
He said the M&A side is “overstated” as a force.
“Classical share deals struggle in this industry because clients follow the relationship manager, not the legal entity. Acquirers want client books; sellers want enterprise value for a legal shell. Those two valuations rarely meet for firms with sub-SFr500 million ($635 million) valuations. And of the deals that do happen, a fair number disappoint – typically because retention is assumed rather than tested, and cultural fit is treated as an afterthought,” Stauber said.
Silent change
“What we will actually see more of is silent consolidation: licence returns, relationship manager transfers, successions handed to a competitor without a transaction sitting on top, and continued growth of platforms such as Aquila, where owners keep their brand and outsource the rest.
“On the upside, the industry comes out more resilient and more investable, with cleaner succession outcomes and independent wealth managers that can finally stand up to the private banks on equal terms. The downside is the loss of small specialists who weren’t replicable, fewer entry points for talent, and the concentration risk that comes with funnelling too much of the market through a handful of platforms,” Stauber said.
Referring to the UK’s RDR experience, Stauber said a useful exercise is to look at the regime’s timeline.
“RDR was in 2013, and the UK landscape is still digesting it in 2026. Switzerland is only four to five years into FinIA and FinSA. Anyone telling Swiss IWM owners that the regulatory adjustment is “behind us” is mispricing it by at least a decade.”
Compliance costs
Another lesson from RDR, Stauber said, is that “compliance cost is a floor, not a slope. Once you’ve crossed it, scale decides – and the survivors are the firms that treated regulation as a forcing function for becoming a better business, not as a tax to be minimised. End clients usually do fine in these transitions; sub-scale firms don’t. There’s a third Swiss-specific layer worth flagging too: Anti-Money Laundering Authority (AMLA), the EU equivalence question and cross-border rules sit on top of FinIA and FinSA, so our owners are juggling more in parallel than the UK ever had to,” he said.
A tri-party setup
WealthBriefing wanted to know what is distinctive about EAMs and why, for example, this business model is not usually used in the UK or the US.
Stauber said the essence of the EAM and independent wealth manager (IWM) operating model is key to understanding how these work.
“In Switzerland and Singapore, the IWM/EAM operates inside a tri-party setup: client, wealth manager, custodian bank. The bank holds the assets, the manager has discretionary or advisory authority under a limited power of attorney, and fees are visible and negotiated separately. In the US, registered investment advisors (RIAs) custody with Schwab or Fidelity, but the typical client is domestic and mass-affluent to HNW; cross-border UHNW is a niche. In the UK, the IFA tradition grew out of insurance and product distribution and has historically been advisory rather than discretionary fiduciary,” he said.
“The difference isn’t really fees or ownership structure. It’s three things together: the custodian bank as the centre of gravity in the relationship; the cross-border, multi-banking heritage of Swiss and Singaporean clients; and the cultural premium on neutrality that makes a non-bank fiduciary feel natural in both centres. None of those things can be copied quickly. That is why Dubai and Abu Dhabi can replicate the licensing framework in short order but are still building the trust layer underneath it,” he said.
A higher bar to entry
Before the new regulatory framework, it was common for former bankers to create EAMs, hoping for more independence. Stauber reflected on what might happen next.
“The bar to set up your own EAM today is materially higher than it was in 2010 – capital, organisational substance, compliance, audit, the FINMA process itself. A senior banker with a transferable book has three rational paths: join an existing EAM, go onto a platform, or co-found with two or three partners who can share the fixed-cost burden from day one. We will see far more of the first two than greenfield founding, and most of the more interesting new firms being born now are small-team breakaways rather than solo flights,” he said.
“Separately, there is a cohort in their late 50s and 60s to watch – senior bankers with full books, deep client trust and zero appetite for office politics. That is the most underappreciated talent pool in Swiss wealth right now,” he added.
Off the books
The size of the present market is around 1,300 organisations today, with visible transactions only making up a fraction of the total, suggesting that most of the consolidation has been “off the books,” for example, via licence returns, partial wind-downs, RMs moving books to bigger EAMs, family successions handed to a competitor rather than a buyer, and others, Stauber explained.
“My rough split is 80 per cent silent, 20 per cent visible and – given that close to 60 per cent of IAMs haven’t arranged succession – the silent share will only grow over the next three to five years,” Stauber said.
To succeed in today’s sector, Stauber recommends that participants should “pick a niche and own it.” Other ingredients for success include cross-border specialisation – playing to Switzerland’s strengths; open architecture as a selling point; consolidated reporting that works across custodians; and transparency on pricing.
“One last point that gets too little airtime: visibility. Most Swiss IWMs are systematically under-marketed – the industry’s `best-kept secret’ framing is partly a compliment, partly an admission of failure. The firms that take brand, content, and digital presence seriously over the next five years will win disproportionately, regardless of what they put in their portfolios. Tech is the enabler for almost all these levers, but tech without a strategic anchor is just expensive software,” Stauber concluded.
Source: WealthBriefing
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