Swiss financial centre faces growing global pressure

Hong Kong is snapping at Switzerland’s heels in the cross-border wealth management sector. Keystone / Jerome Favre

Despite continued growth in its asset management sector, Switzerland is set to lose ground compared with competitors in the coming years, an annual report predicts.

The “Global Wealth Report 2022External link”, published on Thursday by the Boston Consulting Group (BCG), predicts that Switzerland will be pushed out of the world’s top three global centres by the UK by 2026.

The big increase in global wealth in 2021, which saw a rise of 10.6% to $530 trillion (the biggest jump in over a decade), was also seen in Switzerland, where total financial assets rose 5.5% to reach $4.1 trillion (CHF4.3 trillion), the report said. But while the Swiss sector will keep growing to reach $4.6 trillion by 2026, faster increases elsewhere mean it is likely to lose its place in the top three financial centres alongside the US (first) and Hong Kong (second).

Another “notable industry shift” is already expected next year, in the specific area of private cross-border wealth management (i.e. managing wealth from abroad). Here, while again the Swiss sector will keep growing, Hong Kong will “probably” overtake Switzerland – “ending a run of more than 200 years of Swiss dominance” in the sector, BCG wrote. Singapore will even come close to ousting Switzerland from second place in the coming years.

BCG said this faster growth in Hong Kong and Singapore is largely due to their position in the Asian market and their ability to attract younger investors.

Onshore growth

In Switzerland, meanwhile, BCG predicts that onshore financial assets will see a stronger growth rate than cross-border wealth over the next four years, and will increase by 3.2% to $1.9 trillion in 2026.

Overall, despite a backdrop of “geopolitical turmoil” (the war in Ukraine, rising inflation), the BCG expects around $80 trillion in new wealth to be created globally over the next five years – something the report authors said proves “wealth development is resoundingly resilient”.