Wealth in Switzerland: Sizing the Market Opportunity 2016

Wealth in Switzerland: Sizing the Market Opportunity 2016


  • Products Id :- VF0090CI
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  • Pages: 47
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Executive Summary

Switzerland is known for its high standard of living and well-developed private banking market, as well as a favorable tax system kept in check by each of the 26 Swiss cantons. These factors, along with the country's favorable level of economic stability, make Switzerland an attractive location for HNW expat investors. While the HNW segment is forecast to grow at an annual rate of over 5% between 2016 and 2020, the rest of the country's affluent population is expected to develop at a much slower pace.

Key Findings

Switzerland is one of the largest offshore centers in the world, but increased pressure on information exchange has impacted its attractiveness for tax and offshore purposes.

Nearly half of non-resident deposits are sourced from the Americas, accounting for the largest share of total non-resident retail deposits in Switzerland.

At the end of 2014, of the 6.6 million adult individuals living in Switzerland an estimated 74.5% could be considered affluent. The country has by far one of the highest levels of affluent and HNW individuals among sizable economies.

HNW individuals in Switzerland allocate 81.6% of their assets to traditional liquid investments. The Swiss market has a well-balanced allocation outside of deposits, although these still account for 32.8% of total retail investments.

Switzerland has signed numerous agreements to improve collaboration with other nations, and previously reached a Model II Foreign Account Tax Compliance Act agreement with the US. From January 1, 2017, Switzerland will also start exchanging information under the OECD's Common Reporting Standard.

Synopsis

Verdict Financial's "Wealth in Switzerland: Sizing the Market Opportunity 2016" analyzes the Swiss wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets. Specifically the report:

Sizes the affluent market (both by number of individuals and the value of their liquid assets) using our proprietary datasets.

Analyzes which asset classes are favored by Swiss investors and how their preferences impact the growth of the total savings and investments market.

Examines HNW clients' attitudes towards non-liquid investments such as property and commodities.

Identifies key drivers and booking centers for offshore investments.

Examines the tax landscape in Switzerland and future implications for investors.

Reasons To Buy

Benchmark your share of the Swiss wealth market against the current market size.

Forecast your future growth prospects using our projections for the market to 2020.

Identify your most promising client segment by analyzing penetration of affluent individuals in Switzerland.

Evaluate your HNW proposition by understanding how the Swiss tax system impacts HNW clients.

Review your offshore strategy by identifying HNW motivations for offshore investments and their preferred booking centers.



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EXECUTIVE SUMMARY

The Swiss HNW market is forecast to grow at an annual rate of more than 5%

Key findings

Critical success factors

SIZING AND FORECASTING THE SWISS WEALTH MARKET

Switzerland's offshore market is undergoing change

Tax transparency is causing the onshore and offshore wealth markets to diverge

Offshore deposits constitute the largest proportion of non-resident assets

Switzerland's resident and non-resident mutual fund markets display inverse market share growth

The Swiss non-resident retail deposit market is growing

Affluent individuals in Switzerland account for 74.5% of the total adult population

Switzerland has one of the highest levels of affluent individuals among sizable economies

Swiss affluent individuals held over $1,177bn in liquid assets in 2015

DRIVERS FOR GROWTH IN THE SWISS WEALTH MARKET

Growth rates will improve from 2016 after a strong downswing in 2014

The Swiss market is well diversified, with substantial non-deposit holdings

Deposits, equities, and mutual funds will drive growth

Deposits will continue to outperform real GDP growth

Deposits will see steady growth following a lower year-on-year growth rate in 2014

Equities and mutual fund holdings are driven by stock market performance

The Swiss stock market has displayed relatively steady growth in 2016

The performance of the stock market has driven equity and mutual funds

Bond investments are forecast to taper from 2017

HNW INVESTMENT PREFERENCES

HNW individuals allocate 18.4% of their investible assets outside traditional investments

Hedge funds make up the bulk of investments held outside traditional asset classes

Swiss HNW individuals hold 17.9% of their wealth offshore

Tax is a limited driver for offshore investment

Swiss HNW offshore wealth is booked through centers around the world

Switzerland has signed numerous DTCs and information exchange agreements

Switzerland and the US have agreed to a program to settle the ongoing tax dispute between the two countries

APPENDIX

Abbreviations and acronyms

Supplementary data

Definitions

Affluent

Domicile

DTC

FATCA

HNW

Liquid assets

Mass affluent

Mass market

Measures of growth

Onshore

Residency

Exchange of Information

TIEAs

Methodology

2016 Global Wealth Managers Survey

Verdict Financial's Global Wealth Model methodology

The main sub-model

Country sub model

Global Retail Investments Analytics methodology

Verdict Financial's Global Offshore Investments Analytics

Exchange rates

Bibliography

Further reading

About Verdict Financial

Disclaimer

Figure 1: Total retail asset holdings among non-residents decreased in 2015

Figure 2: Offshore retail deposits form the largest non-resident asset class

Figure 3: Non-resident investments into mutual funds have decreased, while resident wealth is increasing

Figure 4: Non-resident retail deposits are showing signs of growth following a period of decline

Figure 5: Offshore centers account for the majority of non-resident deposits in Switzerland

Figure 6: 74.5% of the Swiss population is affluent

Figure 7: HNW individuals will increase their share of total liquid assets to 37% by 2020

Figure 8: Swiss retail savings and investments will display moderate growth out to 2020

Figure 9: The majority of savings in Switzerland are held in deposits

Figure 10: Deposits will outperform the market through to 2020

Figure 11: Steady GDP growth will contribute to improved deposit holdings

Figure 12: SMI industry weightings are strongly concentrated around the healthcare sector

Figure 13: Equity and mutual fund holdings are expected to return to positive growth in 2017

Figure 14: Bond funds constitute 31.9% of retail mutual funds

Figure 15: Bonds growth is set to follow a similar path to GDP performance

Figure 16: 81.6% of Swiss HNW wealth is held in traditional liquid allocations

Figure 17: Swiss HNW individuals hold 17.9% of their liquid wealth offshore

Figure 18: Political instability and currency volatility in Switzerland are the leading motivations for offshore investments

Figure 19: Europe accounts for over half of Swiss HNW offshore booking

Figure 20: Switzerland has agreements with a vast number of countries around the world

Table 1: Maximum canton income tax rates for single taxpayers with no children

Table 2: Total retail resident and non-resident holdings in Switzerland ($m), 2011-15

Table 3: Total Swiss adult population by asset band (000s), 2011-15

Table 4: Total Swiss adult population by asset band (000s), 2016f-20f

Table 5: Total Swiss onshore liquid wealth segmented by asset band ($bn), 2011-15

Table 6: Total Swiss onshore liquid wealth segmented by asset band ($bn), 2016f-20f

Table 7: Swiss franc-US dollar exchange rates, December 31, 2014 and December 31, 2015

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Nestle, Novartis, Post Finance, Roche, UBS

private banking, wealth management, Switzerland, Europe, investments, savings, HNW, offshore, mass affluent, mutual funds, FATCA, AEOI, CRS, REITS

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