Choosing a wealth management relationship in Switzerland is not simply a matter of choosing a bank or an adviser. It is a matter of understanding the nature of their activities.
Two models coexist: the integrated relationship with a private bank, and the relationship with an independent asset manager, or EAM. Switzerland has approximately 1,300 EAMs. This makes it one of the densest and most fragmented markets in the world in this field. The offering ranges from highly specialised entrepreneurial structures to established houses managing several billion francs for their clients.
They developed when bankers or managers set up their own structure while leaving their clients' assets with a bank. Since 2020–2021, professional EAMs have been required to be authorised by FINMA and supervised by a supervisory organisation. The tightening of organisational, compliance, risk management and capital requirements has increased the importance of critical mass; some structures have merged or consolidated, while smaller ones have sometimes chosen to cease operations rather than durably absorb these costs.
The question, therefore, is not which model is better in general, but which one best serves your wealth, your financing needs and your transparency requirements.
The functions of a wealth management relationship
A wealth relationship comprises asset custody, investment management or advice, order execution, credit, reporting and risk monitoring.
A private bank can provide all of these functions. An EAM operates mainly on strategy and management, while the custodian bank holds the assets and provides the banking infrastructure.
What a private bank brings
A private bank offers an integrated proposition, including custody, execution, reporting, advice or discretionary management. It may also provide lombard credit, real estate financing, foreign exchange solutions or wealth structuring. It is often well suited when the wealth relationship requires integrated services or a complex international dimension.
The EAM: separating management from the custodian bank
This model allows wealth management to be separated from its custody. Under an advisory or discretionary management mandate, it can propose an allocation, select investments, monitor the portfolio and transmit orders to the custodian bank.
This organisation can be particularly relevant for families who wish to:
- keep several custodian banks while maintaining a consistent strategy;
- diversify banking counterparty risk;
- benefit from a stable point of contact;
- access specialised expertise in certain asset classes or certain client profiles.
Independence must be verified
The term "independent" does not, on its own, guarantee the absence of conflicts of interest. A private bank may offer open architecture; an EAM may maintain privileged economic relationships with certain banks, funds or product providers. Genuine independence rests on transparency of remuneration, freedom to select solutions and the quality of governance.
Fees and performance: comparing what matters
The comparison must never be limited to the stated management rate. Private banks and EAMs both involve three levels of cost:
- fees related to the custodian bank and to operations;
- management or advisory fees;
- the internal fees of products held within the portfolio.
No structure is necessarily less costly as a matter of principle. The issue is to reconstruct the total cost actually borne, to identify to whom each item of remuneration is paid, and to assess the service provided in return.
Performance must then be analysed net of all these costs, in light of the risk actually taken and the agreed strategic allocation. Higher returns may simply reflect greater exposure to equities, currencies, credit or illiquid assets. A relevant comparison relies on a benchmark index consistent with the mandate. It allows one to distinguish the effect of strategic allocation, tactical choices, investment selection and fees borne.
The role of IM Wealth Select
Choosing a private bank or an EAM should not rest solely on a recommendation, a longstanding relationship or a commercial presentation.
IM Wealth Select provides an independent and structured comparison framework: governance, team stability, credit capabilities, investment architecture, custodian banks, reporting, operational continuity and pricing terms.
We make fees comparable and analyse net performance in light of risk and the client's allocation. Our role is not to mechanically designate the highest return, but to assess whether the result obtained justifies the risks and costs borne.
We are remunerated exclusively by our clients and receive no commission or retrocession from the banks, EAMs or products evaluated.
To go further: evaluate your current private bank and how a formal RFP process allows us to negotiate on your behalf.