The wealth management landscape could soon transform as the rich become more cautious about how they invest their assets, observers believe.
The world's largest wealth manager, UBS, saw net outflows of nearly SFr50 billion ($43 billion) in the third quarter as rival Credit Suisse and smaller banks saw more money flooding into their coffers.
One expert in the fast expanding Asian market believes the shift signals a "day of reckoning" for the private banking sector as clients take stock after losing money in the global financial crisis.
"We have seen loss of assets, withdrawals, angry customers, endless margin calls, people locked into structured products and a loss of trust and confidence," Roman Scott, managing director of Singapore-based investment advisory firm Calamander group, told swissinfo.
"The industry has concentrated on gathering assets, but at some point, if customers are not happy with performance, it is going to start feeling the backlog of the lack of service that has been accumulating for the last five years."
Wealthy people across the world have been withdrawing their assets from large financial institutions into smaller domestic banks to ride out the current market turbulence.
Just a blip?
Such wealth will re-emerge once the storm subsides, but the psychology of investors will have changed for good, according to Scott.
"The days of immature, unsophisticated customers who take what private banks say for granted are gone. It is going to be more difficult to get these people to open their wallets and invest in them," he said.
"They are going to be looking for wealth managers that actually represent and manage their interests rather than sell them products. We will see independent boutique players and family offices growing at the expense of the big institutions."
However, not all observers agree with the analysis that the big players will start to lose a market share in the wealth management sector. Swiss banking expert, Professor Teodoro Cocca of the Johannes Kepler Institute in Austria, believes the retreat from established names may be just a blip.
Cocca agrees that trust in banks such as UBS has been eroded by the events of the last 12 months, but he insisted that wealth would start to flow back to Switzerland's largest bank.
"At some point customers are going to realise that smaller banks and boutiques cannot offer the same level of services as the large institutional transnational sector," he told swissinfo.
Pulling up socks
"Hardly any small bank can give professional advice on the Asian market. They would have to buy in research and sell it to their clients. They also lack specialist tax expertise for clients who have an international real estate portfolio."
UBS was cautiously optimistic about the future as it revealed its third quarter results on Tuesday. It said that most of the withdrawals of assets had occurred during the turbulent month of September, but had seen "encouraging signs" since it accepted a bailout from the Swiss National Bank last month.
"We know we need to pull our socks up to motivate our client-facing people and re-establish UBS as the bank it used to be," UBS chief financial officer John Cryan told Reuters. "Before we can see strong inflows we need to see more stability in the markets."
swissinfo, Matthew Allen in Zurich
Do you trust your bank?
Swiss banking customers have less faith in the two largest institutions, UBS and Credit Suisse, than a year ago, according to a survey by advertising agency Young & Rubicam.
Some 80% of the people surveyed thought UBS less reliable over the last 12 months while half of the respondents had the same opinion of Credit Suisse.
Cooperative bank Raiffeisen is the clear winner with an approval rating 20% higher than this time last year, but there was little change in the attitude towards cantonal banks despite strong savings guarantees.
Some 65% of respondents criticised the use of central bank funds to bail out UBS last month. And four fifths believe that managers of failing banks should hand back their bonuses.
Two thirds of those surveyed said they would be more cautious about making large investments with their assets.
UBS Q3 results
Switzerland's largest bank, UBS, reported a profit of SFr296 million ($251.4 million) in the third quarter of 2008, helped by its own credit and tax gains.
The bank said outflows from its core wealth management business totalled a record SFr49.3 billion and a further SFr34.4 billion was taken out of its Global Asset Management business.
Massive exposure to risky United States assets has forced UBS to make nearly $49 billion in writedowns, more than any other European bank, prompting the Swiss state to take a stake in October and the central bank to set up a fund to absorb its most illiquid assets.