A generational shift is on the horizon for Swiss wealth managers, with the U.S. offering valuable insights into how to navigate this evolving landscape. The independent wealth management industry in the U.S. has seen substantial growth over the past few decades, particularly the Registered Investment Advisors (RIA) sector, which has transformed from small boutique firms into scalable platforms. Despite structural differences between the U.S. and Switzerland, opportunities for growth abound in the Swiss market.

Two Systems with a Shared Mission

Swiss independent wealth managers (IWMs) often have their roots in private banking, whereas RIAs in the U.S. stem from traditional brokerage firms, or wirehouses. Yet, both aim for a common goal: providing clients with an independent, long-term investment strategy free from corporate biases.

Both markets are relatively young, with their professionalization beginning around three decades ago. Today, they face similar challenges: sustainable growth, regulatory pressure, client retention through generations, and the pursuit of structured succession planning.

The U.S. as a Role Model for Entrepreneurial Spirit

A notable distinction lies in client acquisition strategies. “American advisors had to cultivate their client relationships from scratch, whereas Swiss advisors often began as assistants, gradually inheriting their clients,” explains Fernand Schoppig, CEO of FS Associates, an international consulting firm. This entrepreneurial foundation has significantly influenced the U.S. industry.

Many Swiss advisors have moved from major banks to independence, which has led to a dependence on existing networks. As a result, American RIAs are typically more marketing-savvy, tech-focused, and inclined to approach innovative techniques—qualities that facilitate scalability. Additionally, they often specialize by targeting specific groups, including entrepreneurial families, healthcare professionals, athletes, or tech innovators.

Rapid Growth

Both the U.S. and Switzerland have witnessed swift sector growth, with the U.S. seeing the number of RIAs managing over $1 billion in assets more than doubling in the last seven years. “The rapid expansion of top RIAs is primarily driven by acquisitions funded by private equity. While this strategy is still rare in Switzerland, increasing consolidation suggests that private equity may soon become a player here too, potentially leading to a U.S.-style evolution,” notes Brad Bueermann, CEO of FP Transitions, a firm that aids wealth managers in business valuation and succession.

Fernand Schoppig (left) and Brad Bueermann highlight the ongoing changes in wealth management.

Spotlight on Succession Planning

Succession planning remains a significant challenge in both markets. The U.S. has seen various models emerge, from management buyouts to sales to strategic investors or private equity firms. Switzerland, still at the beginning of this journey, is witnessing a gradual increase in transactions.

A Culture of Acquisitions Still Lacking

Though the Swiss market is smaller and more established, it mirrors the U.S. demographic patterns from around a decade ago, including a significant number of IWM owners over 60. While there isn’t yet a strong culture of acquisitions in Switzerland, the impending wave of retirements could catalyze change,” Bueermann remarks.

Additionally, the rise of platform providers that consolidate several wealth managers could lead to these entities becoming active acquirers in the future.

Questions & Answers

What can Swiss wealth managers learn from their U.S. counterparts? Swiss wealth managers can look to the U.S. for guidance on scaling operations, adopting entrepreneurial spirit, and improving client acquisition strategies.

How are succession planning challenges similar in both markets? Both Swiss and U.S. wealth managers struggle with balancing continuity in client relationships while creating tangible value for the business owners during succession.

Is there potential for private equity investment in Switzerland’s wealth management sector? Yes, increasing consolidation among Swiss wealth managers indicates that private equity could soon play a role similar to that seen in the U.S., heralding potential industry shifts.