Reports say Swiss banks are expanding wealth management services in London despite fears of a Brexit fallout.
At the same time as big global banks are considering alternatives to London in the wake of the Brexit vote, Swiss newspaper Le Matin Dimanche reports, financial institutions are also recruiting new staff in the City.
Rather than in commercial banking, however, these employees specialise in private wealth management. Here “the attractiveness of the City is increasing, and demand is constantly growing,” said Jamie Broderick of UBS to the Financial Times.
UBS has already increased by 10% its staff in this sector in London, and “wants to recruit more”, he said, even as it plans to shift large numbers of other staff elsewhere in Europe to avoid the possible complications of Britain’s withdrawal from the EU.
It is not the only bank. Christian Berchem of Credit Suisse, also quoted by the Swiss paper, mentioned “enormous opportunities in the British market,” while the CEO of Pictet UK confirmed that his bank would be doubling the wealth managers on its books this year.
Switzerland remains the world’s largest centre for offshore wealth management, handling around one-quarter of global private wealth last year, according to a reportexternal link last month by the Boston Consulting Group.
However, the same report outlined some trends that have caused concern for Switzerland’s place: the rise of Asian hubs such as Singapore and Hong Kong, and in Europe, EU-member state Luxembourg and indeed the city of London.
Last year, Swiss financial centres dropped down the rankings of the Global Financial Services Index: Geneva fell to the 23rd most attractive globally, while Zurich moved from sixth to ninth. London retained top spot, behind New York, Singapore, Hong Kong, and Tokyo.
Banking secrecy is also a factor. As new rules, which were introduced earlier this year and set to come into force in 2018, erode the advantage of Swiss banks, the position of London may seem an attractive alternative, says Le Matin Dimanche.
The idea of recouping Brexit losses by changing its financial model has also been discussed in Britain. In January, British finance minister Philip Hammond suggested the country could double down on its tax attractiveness to become a corporate tax havenexternal link if leaving the EU meant being closed off from European markets. He later pulled back from the idea.
London is already home to over 50 billionaires, the largest concentration in Europe. Notably, it also hosts 400,000 millionaires. Switzerland is home to 667,000 in total.