Comparing private banks in Switzerland is a process that few affluent clients undertake in a structured manner. When a banking relationship already exists, it has often been built through recommendation, family proximity, habit or simple continuity. The private banking universe remains largely opaque and the information genuinely useful for comparing institutions is not always readily accessible.
There is no universal ranking of private banks: the needs of an entrepreneur, a family or a retiree differ profoundly. A rigorous method does, however, allow one to assess a wealth manager across five dimensions: institutional soundness, service quality, total fees actually borne, performance and alignment of interests.
Institutional soundness
In Switzerland, the deposit guarantee covers assets up to CHF 100,000 per client per institution. Securities held in custody are in principle segregated from the insolvency estate — but the soundness of the bank remains decisive for your liquidity, your credit facilities and continuity of service.
Five elements deserve scrutiny: the CET1 capital ratio compared with peer institutions; liquidity and the trend in assets under management; profitability and the cost-to-income ratio over several years; stability of ownership and management; and significant legal or regulatory risks.
The acquisition of Credit Suisse by UBS in 2023 was a reminder that an institution's reputation is no guarantee of soundness.
Real service quality
Quality service rests on the bank's ability to understand the overall wealth situation and mobilise the necessary expertise.
Wealth structuring: does the bank take into account your domicile, your nationality, your cross-border assets and your succession issues?
Team stability: is the relationship managed by a private banker and a team capable of understanding your situation over time?
Depth of expertise: does the bank have recognised capabilities in bonds, equities, private equity, private debt and real estate — or does it limit itself to distributing third-party products?
Operational transparency: can you easily review your performance, your fees and your exposures by currency and asset class?
Total fees: what you are actually paying
Stated fees — custody charges, management or mandate commission — represent only a fraction of the total cost. Added to these may be performance fees, transaction costs, foreign exchange margins, stamp duties and costs relating to lombard credit lines and retrocessions.
Particular attention is required for mandates invested in internal funds: the client then bears two cumulative layers of fees. For a discretionary mandate, a total cost above 1.5% per annum warrants detailed analysis.
Performance: comparing like with like
Portfolio performance must be analysed in light of the level of risk accepted, the agreed strategic allocation and the tactical decisions taken during the mandate. High performance may simply reflect greater exposure to equities or risky assets — moderate performance may be perfectly consistent with a cautious profile.
The comparison must be based on a composite index constructed from the portfolio's strategic allocation. This analysis allows one to distinguish what is attributable to allocation, tactical choices, security selection and fees — and to determine whether net performance genuinely justifies the risks taken and the costs borne.
Alignment of interests
This is the central question. A wealth manager remunerated by the bank may receive part of their income from recommended products. Like a family office, an independent adviser is paid exclusively by the client — with no incentive to favour one product over another. This is the prerequisite for objective advice.
To go further: how a formal RFP process allows us to negotiate on your behalf and private bank or independent asset manager: understanding the two models.