Swiss losing ground faster to Asian rivals in wealth, BCG says

[ZURICH] Switzerland is facing a stiffer challenge to its position as the world’s top wealth management centre from Asian rivals, according to a Boston Consulting Group (BCG) report.

Assets last year increased by 6 per cent to US$2.7 trillion, compared with a 9.6 per cent gain at main competitor Hong Kong, which is fast closing in on its Swiss rival, according to BCG’s Global Wealth Report published on Tuesday (Jun 24).

Singapore and the United Arab Emirates recorded the strongest growth in assets, at 11.9 per cent and 11.1 per cent respectively.

The report pointed to increased macroeconomic uncertainty, pushing up money flows across borders. It also comes amid a rising chorus of voices warning that European financial players, and Switzerland in particular, risk falling behind global rivals due to increased regulation.

The Swiss government kicked off a broad revamp of financial regulation in the wake of the collapse of Credit Suisse in 2023, which includes more powers for the watchdog Finma as well as sharply higher capital requirements for the country’s biggest bank, UBS Group. Still, the nation’s reputation as a safe haven has been dented – evidenced by the stance of major investors such as Saudi Arabia’s Public Investment Fund. The fund said in May that it would not invest further in Switzerland.

Wealthy Swiss residents have also threatened to move away over a looming vote which could tax half of any passed-on wealth above 50 million Swiss francs (S$79 million).

“Investors increasingly use safe havens abroad in turbulent phases,” said Michael Kahlich, a BCG partner and co-author of the study. “This is particularly true for the very wealthy clients of asset managers.”

Global net wealth in 2024 went up by 4 per cent, mostly driven by growth in North America, and parts of Asia and the Middle East, according to the BCG report. BLOOMBERG