The stock market boom boosted personal financial wealth around the globe by 12% last year – to the benefit of Switzerland. It is still the world’s biggest centre for managing offshore wealth at $2.3 trillion (CHF2.3 trillion).
Figures revealed in a Boston Consulting Group reportexternal link published on Thursday put the country ahead of Hong Kong ($1.1 trillion) and Singapore ($900 billion). The Swiss sum is the equivalent of almost one third of all global overseas wealth.
The two Asian centres have grown at yearly rates of 11% and 10% respectively over the past five years, compared with the 3% rate of Switzerland.
“Over the next five years, offshore wealth seems likely to continue growing at a (compound annual growth rate) of roughly 5% per year,” the report stated.
Large wealth managers including Swiss banks UBS and Credit Suisse are increasingly looking into Asian market because Swiss banking secrecy has been weakened.
Haven of stability
Experts had expected that stronger transparency rules and the automatic exchange of information would harm offshore wealth in Switzerland more, according to Swiss public television, SRF.external link
But the country appears to have profited from the current geopolitical uncertainty, Matthias Naumann from Boston Consulting told SRF.
“In these times, rich clients are looking for havens of stability for parts of their wealth,” he explained. Switzerland offers financial and political stability as well as legal certainty, privacy protection and access to financial markets. “Switzerland does well in all these criteria,” Naumann said.
The majority of the overseas wealth in Switzerland comes from Germans, the French and the Saudis.
The flow of overseas wealth to Switzerland had come in for much criticism in past years, due to concerns over tax evasion. Andreas Missbach from the non-profit Public Eyeexternal link is now less critical.
“Compared with earlier times, there is now a lot of money in Switzerland which has not been subject to tax evasion,” he told SRF.
This is because Switzerland has signed agreements for the automatic exchange of information with around 40 countries. This should be extended to other countries, especially developing nations, Missbach said.