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Swiss financial centre draws out plan to become leading asset management location

Thursday, December 06, 2012
Opalesque Industry Update - Switzerland is aiming to become a leading location for asset management in the coming years. A joint working group of the SBA and the SFA today put forward eight areas for action that will provide an optimal operating framework. Strengthening asset management will put the Swiss financial centre on a broader footing, complement existing business areas and make up for those that are in decline.

The Swiss financial centre mainly has a reputation for wealth management. Asset management, a key provider of products and services for institutional and private investors, is a business area that has to date received little attention in Switzerland or abroad. Most banks in Switzerland have their own asset management activities, but these are rarely regarded as a stand-alone part of the core business. A 2011 study by the Swiss Bankers Association (SBA) and Boston Consulting Group indicated that the focused expansion of asset management as a business area could boost gross revenue by up to CHF 1.8 billion by 2015.

Objectives in asset management
A joint working group of the SBA and the Swiss Funds Association SFA today put forward a white paper showing how the Swiss financial centre can be expanded to become a leading asset management location. The aim is to establish asset management in Switzerland as an important field of activity of the Swiss financial sector. On the international scene it is to stand for high reliability, independence and quality and to be known and recognised for these characteristics throughout the world. This will make asset management into one of the main pillars of the Swiss financial centre, alongside wealth management, private banking and client-oriented investment banking.

Eight areas for action
The white paper picks out eight areas where targeted measures should create an optimal operating framework for offering products and services in Switzerland and abroad. These are:

1. Establishing asset management as a brand
2. Developing and applying standards for asset management
3. Ensuring appropriate regulation
4. Improving market access
5. Promoting the right vehicles and structures for asset management
6. Establishing an optimal tax environment (including various levies) for investors
7. Expanding infrastructure in a targeted manner
8. Providing specific training

A call to all participants
Most of the initiatives can be implemented by the banks and other financial institutions themselves. Developing the brand, innovative vehicles and structures, meeting client needs and a consistently high level of quality are in the hands of the asset managers themselves. Trade associations, infrastructure providers and other industry bodies can promote recognised standards, good infrastructure and training issues. Regulation, market access and the tax situation, by contrast, are largely in the hands of politicians and the authorities, who must also do their bit to promote asset management.

SBA CEO Claude-Alain Margelisch comments: "The entire financial centre is backing this initiative to turn Switzerland into a top location for asset management. We hope that Swiss government bodies and regulators will support this. By doing so, we will put the financial centre on a broader footing, minimise systemic risks and create opportunities for the future."

Markus Fuchs, Senior Counsel at the SFA, explains: "Collective investments, especially funds, are key building blocks for asset management, along with other traditional and alternative investments ranging from equities to real estate and commodities. These are appropriate instruments for managing wealth. Hence, the fund business must also be suitably promoted in future."

Low-risk and requiring little capital backing
Asset management products and services are needed by both private and institutional investors. The latter include insurance companies and pension funds, who have a major interest in asset management being high-quality and efficient. In contrast to the traditional lending or insurance business, asset management has very little systemic or reputation risk because it is not involved in balance sheet transactions. Asset management is therefore capital-light, making it especially attractive for banks. The measures set out in the eight areas should be implemented in the next few years as a matter of priority.


(Press release from the Swiss Bankers Association and the Swiss Funds Association SFA)

The full white paper can be downloaded from www.swissbanking.org and www.sfa.ch


Related coverage:
05.12.2012 - Swiss SFA welcomes agreement on implementation of FATCA in Switzerland Source

03.12.2012 - Swiss Funds Association welcomes cooperation with ESMA and EU on alternative investment funds Source

26.11.2012 - Opalesque Roundtable Series - Zurich 2012, in which Markus Fuchs participated Source

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