Table Of contents
Overview 1
Catalyst 1
Summary 1
Methodology 1
Executive Summary 2
Swiss banks' offshore clients are international, heavily invested in fixed income, and likely to take on more risk going forward 2
Offshore banks looking to attract clients should provide excellent customer service 2
To attract and retain offshore clients, banks must address client issues surrounding safety and confidentiality, excel at customer service, and help clients enjoy high returns 2
Table of Contents 3
Table of figures 4
Table of tables 5
Swiss Banks' Offshore Clients 6
Switzerland draws its offshore clients from all around the world 6
Western European clients are important to Swiss banks, but many of their clients also come from much further afield 6
Germans make up the largest part of Switzerland's Western European client base 7
Swiss banks have attracted wealthy individuals from major Asia Pacific countries 9
Offshore clients keep their money in Swiss banks because they feel it is safer offshore 11
Many German clients still see Switzerland as a safe haven for their money 11
Hong Kong clients with money in Swiss banks also feel as though their money is safer offshore 13
The average portfolio of an offshore client is heavily invested in fixed income, which is not likely to change much going forward 14
Fixed income accounts for 37% of all Swiss assets under management 14
Offshore clients are expected to embrace riskier asset classes going forward 15
Offshore clients are not likely to move their assets 17
Swiss banks' offshore clients are not likely to switch their offshore center or offshore bank 17
Swiss banks' offshore clients are likely to step-up their risk appetite in future 19
Swiss banks' offshore clients draw their wealth from a variety of different sources 20
The single largest source of wealth among offshore clients is inheritance 20
The Competitive Environment in Switzerland 22
Swiss banks' offshore clients prioritize excellent service, confidentiality and stability from their offshore banks 22
Above all else, offshore clients are looking for excellent customer service 22
New government policies are a major catalyst for offshore client defections from Swiss banks 24
Swiss bankers are very concerned about government clampdowns against Swiss banking 24
Swiss banks' offshore clients do not frequently use online services 26
A significant number of offshore clients make no use of online services 26
Swiss bankers predict strong demand for asset management services in two years' time 27
Going forward, discretionary and advisory asset management should be in strong demand from clients 27
Discretionary asset management is seen as the best way for banks to attract new offshore business 29
In terms of basic accounts, offshore clients are looking for high interest rates, no fees and multiple currencies 31
Offshore clients have fairly common requirements when it comes to deposit accounts and savings accounts 31
Strategies for Success in Switzerland 34
The provision of international financial advice is key 34
Datamonitor has identified six key strategies that Swiss bankers should pursue 36
Strategy one: work at improving clients' perceptions regarding safety and confidentiality 37
Strategy two: excel at customer service 37
Strategy three: cater for and encourage the return to riskier products 37
Strategy four: help clients tap into higher returns 38
Strategy five: develop asset management services 38
Strategy six: target Chinese and Indian investors 38
Appendix 39
Definitions 39
Domicile 39
Offshore 39
Tax amnesty 39
Methodology 39
Bibliography 39
Further reading 39
Ask the analyst 40
Datamonitor consulting 40
Disclaimer 40
List of Tables
Table 1: In terms of assets under management, approximately what percentage of your offshore clients live in the following regions? 7
Table 2: In terms of assets under management, what percentage of your Western Europe-based clients live in these countries? 9
Table 3: In terms of assets under management, what percentage of your Asia-Pacific-based clients live in these countries? 10
Table 4: Thinking about your clients living in Germany, what are their main motivations for putting money offshore? (Choose top three reasons) 12
Table 5: Thinking about your clients living in Hong Kong, what are their main motivations for putting money offshore? (Choose top three reasons) 14
Table 6: What percentage of your offshore client base's assets under management is allocated to the following five asset categories today? 15
Table 7: What percentage of your offshore client base's assets under management do you expect to be allocated to the following five asset categories in two years' time? 16
Table 8: On a scale of 1-4, please rate your offshore clients in terms of the following attributes (1 = very low, 4 = very high) 19
Table 9: On a scale of 1-4, please rate your offshore clients in terms of their appetite for risk (1 = significantly lower, 4 = significantly higher) 20
Table 10: Around what proportion of your offshore client base accumulated their wealth through the following means? 21
Table 11: Why did your offshore clients choose your bank? (Choose top three reasons) 24
Table 12: What are the most likely reasons for offshore clients to leave your bank? (Choose top three reasons) 26
Table 13: How often do most of your offshore clients use your online services? 27
Table 14: On a scale of 1-4, please rate the following products and services in terms of expected demand from your offshore clients in two years' time (1 = no demand, 4 = a lot of demand) 29
Table 15: Which products and services are most likely to attract new offshore business to your bank? (Choose top three products and services) 31
Table 16: What deposit account features will be most important to your offshore clients in the next year? (Choose top two features) 32
Table 17: What savings account features will be most important to your offshore clients in the next year? (Choose top two features) 33
Table 18: What is the best way to ensure that your offshore client base keeps its wealth with you offshore? (Choose one) 36
Table 19: Characteristics of offshore clients in Switzerland and suggested strategies for targeting them 37
List of Figures
Figure 1: In terms of assets under management, most Swiss banks' offshore clients are from Western Europe 7
Figure 2: Germany accounts for almost one third of all of Switzerland's Western Europe-based clients, by assets under management 8
Figure 3: Hong Kong residents account for 20% of Swiss banks' Asia-Pacific-based clients, by assets under management 10
Figure 4: German clients place their money in Swiss banks because they feel it is safer offshore 12
Figure 5: Hong Kong clients place their money in Swiss banks because they feel it is safer offshore 13
Figure 6: Offshore clients' asset under management in Switzerland are weighted towards fixed income 15
Figure 7: In two years' time, fixed income will still be the largest asset category within the portfolios of Swiss banks' offshore clients 16
Figure 8: Swiss banks rate their offshore clients very highly in terms of their intention to keep their assets offshore 18
Figure 9: Swiss banks' offshore clients are expected to have a higher appetite for risk in two years' time compared to today 20
Figure 10: Inheritance is the single largest source of wealth among Swiss banks' offshore clients 21
Figure 11: The most important factor in Swiss banks' offshore clients' choice of bank is excellent customer service 23
Figure 12: The most likely reason for Swiss banks' offshore clients to leave is new government policies against offshore centers 25
Figure 13: Swiss banks' offshore clients rarely use online services 27
Figure 14: In two years' time, Swiss banks' offshore clients are expected to show strongest demand for advisory asset management 28
Figure 15: Discretionary asset management is expected to attract the most new offshore business for Swiss banks 30
Figure 16: A high interest rate is the deposit account feature expected to be most important to Swiss banks' offshore clients 32
Figure 17: Swiss banks' offshore clients are expected to look for various features in their savings accounts in the next year 33
Figure 18: The best way for Swiss banks to ensure their offshore clients keep their wealth where it is, is to provide international financial advice 35