Market Analysis of Independent Asset Managers and Family Offices
Independent Asset Managers and Family Offices represent an important part of the Swiss wealth management industry. The market is highly fragmented and mainly consists of small entities. Upcoming regulatory changes will threaten and reshape the market and challenge many companies.
Meier Silvan Benedikt & Perler Cyrill Marcel & Werthmüller Patrick Philip & Brodbeck Tobias Samuel, 2014
Projektarbeit/Praxisprojekt, LB (Swiss) Investment AG
Keywords: Swiss Independent Asset Management Industry
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Many important regulations concerning the Swiss financial market have arisen over the last years. The emergence is due to customer protection, level playing field and meeting international standards. Independent asset managers and family offices will be affected in terms of a standard regulatory level. Small players are particularly threatened by the required regulatory efforts due to their small business size. As the market mainly consists of small entities, it is predicted that there will be various changes in the field in order to adjust to the new regulatory environment.
The project team conducted 13 interviews with independent asset managers and two interviews with family offices in Switzerland. The questionnaire used for the interviews was structured according to a business model and had its focus on how they will address regulatory alternations. In a later step, data collected during the interviews was categorised and consolidated. Thereafter, results were compared and discussed with studies and publications. Conclusions have been drawn on likely reactions towards regulatory changes.
The regulatory efforts are expected to create entry barriers, driving small participants out of business or forcing them to either be subject to an acquisition or partnership. As a consequence, the market is going to be more consolidated, consisting of fewer but larger participants making use of economies of scale by inter alia sharing regulatory efforts. Bigger firms are expected to induce an increase in outsourcing activities. In particular, compliance and risk management tasks are likely to be outsourced. Furthermore, the regulatory burden as a disincentive for setting up own funds is going to be weakened after most regulations in question have to be mandatorily met. The size increase of the market participants will boost the attractiveness of having own funds, because of its economies of scale character. It is expected that this leads to a slight increase in the number of entities setting up own funds. In combination with the increasing consolidation, this might lead to future business growth of existing companies to which side activities such as fund administration and compliance can be outsourced.
Studiengang: Business Administration International Management (Bachelor)
Fachbereich der Arbeit: Accounting, Banking, Controlling and Finance