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Offshore Financial Services in Switzerland 2004

Product Type: Market Research Report
Published by: Datamonitor
Published: September 2004
Product Code: R313-7088
Description
Introduction
Offshore Financial Services in Switzerland 2004 combines industry opinion with Datamonitor's proprietary databases to analyze offshore deposits and mutual funds markets in Switzerland. The report size and segments these markets as well as providing competitor insight on customer preferences, issues, trends and competitive dynamics.

Scope
Sizing of the offshore deposits and mutual fund markets in Switzerland
Segmentation of both market sectors between retail and insitutional holdings and by source country of assets
Assessment of the regulatory context and key issues facing the industry based on Datamonitor's Offshore Market Leaders Survey of key competitors
Forecasts the offshore deposits and fund sectors through to 2006
Highlights
Offshore investment in Switzerland peaked in 2000, totaling CHF2,299.5bn, before falling off through 2002 to recover at CHF2,124.8bn at the end of 2003. Equities were affected the most, falling by 2.4% compounded annually from 1999 to 2003.

While most companies have tried to reassure customers by formally communicating the Directive's implications, or are planning to do so, most are also thinking about how to develop products that will not be affected, including offshore investment (or portfolio) 'bonds', which are effectively investment portfolios held as life assurance policies.

57% of Switzerland's offshore deposits came from Europe in 2003, with the UK dominating those European flows. This is unsurprising given the Swiss players' strategies to build up their onshore presence in Europe. The US is also a large contributor to Swiss offshore deposits, although US investors tend to put their money offshore in the Caribbean.

Reasons to Purchase
Quantify the potential of your sector using our offshore deposits and funds market sizing and segmentation
Assess the future of your market with our forecasts to 2006
Design your marketing and product innovations around our source of deposits and funds data and survey results

Table of Contents
TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION 10

What is this report about? 10

Who is the target reader? 10

How to use this report? 10

CHAPTER 2 MARKET CONTEXT 12

Introduction 12

The offshore financial services market, 1999-2003 12

Market size, 1999-2003 12

Market growth, 1999-2003 13

Retail vs institutional offshore investment, 2003 14

Regulation and taxation 15

The Patriot Act 17

European Savings Tax Directive 19

Trends and issues in Swiss offshore financial services 23

Banking secrecy under threat … eventually 23

Focus / shift to onshore 24

Consolidation in the Swiss market 27

Data tables 29

CHAPTER 3 CUSTOMER FOCUS 33

Introduction 33

Source of offshore deposits and funds, 2003 33

Features demanded by clients in Switzerland 34

Data tables 38

CHAPTER 4 COMPETITIVE DYNAMICS 41

Introduction 41

The main players in Swiss offshore financial services 41

Switzerland’s most innovative offshore providers 44

Competitor profiles 44

UBS 44

Credit Suisse 46

Julius Baer Private Banking 48

Pictet & Cie 49

LODH 50

UBP 51

Vontobel Private Banking 52

Data tables 54

CHAPTER 5 THE FUTURE DECODED 56

Introduction 56

Future threats and opportunities 56

Biggest threats to Swiss offshore financial services 56

Best opportunities in Swiss offshore financial services 57

Most likely to gain market share 60

Swiss offshore deposits and mutual funds market, 2004-6 61

Market growth, 2004-6 61

Likely changes to geographic source of business 63

Data tables 65

CHAPTER 6 APPENDIX 67

Definitions 67

Research methodology 67

Historic offshore data 67

Forecast methodology 68

Offshore Market Leaders Survey 69

Further reading 69

Datamonitor Global Wealth Service SPP: Reports 69

Datamonitor Global Wealth Service SPP: Insight Reports 70

Datamonitor Global Wealth Service SPP: Competitor Tracking 70

Datamonitor Asia Pacific Wealth Management SPP: Reports 71

Datamonitor Savings & Investments SPP: Reports & Briefs 71

SPP writing team 71





LIST OF TABLES

Table 1: Total offshore assets in Switzerland by product sector, 1999-2003 29

Table 2: Year-on-year growth of offshore assets in Switzerland, by product sector, 2000-3 29

Table 3: Total offshore assets in Switzerland by product sector, retail v institutional, 1999-2003 30

Table 4: Retail offshore assets in Switzerland by product sector, 1999-2003 30

Table 5: Institutional offshore assets in Switzerland by product sector, 1999-2003 31

Table 6: What effect do you think the Patriot Act will have on Switzerland's offshore financial services market? Choose one 31

Table 7: What impact do you think the EU Savings Tax Directive will have on Switzerland's offshore financial services business? Choose one 32

Table 8: Have you formally communicated the EU Savings Tax Directive and its implications to your clients? and Do you plan to do this formally? 32

Table 9: Offshore deposits segmented by geographic source, 2003 38

Table 10: Offshore mutual funds segmented by geographic source, 2003 39

Table 11: What are the three most important features that your local customers look for when choosing you as their financial services provider? Choose up to three 39

Table 12: What are the three most important features that your corporate customers look for when choosing you as their financial services provider? Choose up to three 40

Table 13: What are the three most important features that your expatriate customers look for when choosing you as their financial services provider? Choose up to three 40

Table 14: UBS Wealth Management financial performance, 2001-2003 46

Table 15: Credit Suisse Private Banking financial performance, 2001-2003 48

Table 16: Julius Baer Private Banking financial performance, 2001-2003 49

Table 17: Pictet & Cie financial performance, 2001-2003 50

Table 18: UBP financial performance, 2001-2003 52

Table 19: Vontobel Private Banking financial performance, 2001-2003 53

Table 20: Who are the biggest competitors in offshore deposits in Switzerland? 54

Table 21: Who are the biggest competitors in offshore mutual funds in Switzerland? 55

Table 22: UBS, Credit Suisse and Pictet are tipped to be in the best position to gain market share in the next two years 61

Table 23: What will be the biggest threat to offshore revenues in Switzerland in the next two years? Choose one 65

Table 24: Thinking about opportunities in the Switzerland offshore market, what will be the best way to increase offshore revenues in Switzerland in the next two years? Choose one 65

Table 25: What will be the best way to gain more offshore clients in Switzerland in the next two years? Choose one 66

Table 26: Offshore deposits and funds in Switzerland, 2003-6f 66





LIST OF FIGURES

Figure 1: Offshore investment to Switzerland has taken a beating since 2000, but recovered somewhat in 2003 13

Figure 2: Only offshore deposits maintained growth over the 1999-2003 period 14

Figure 3: Retail customers dominate the offshore mutual funds market in Switzerland, 2003 15

Figure 4: Four fifths of respondents view the Patriot Act as negative for offshore business in Switzerland, June 2004 19

Figure 5: Roughly a quarter of respondents think the EU Savings Tax Directive will have either no effect or a slight positive effect; all others view it as negative 22

Figure 6: The majority of Swiss financial services companies have already talked to their clients about the Tax Directive 23

Figure 7: The majority of Swiss offshore deposits come from Europe, 2003 33

Figure 8: Offshore funds in Switzerland are dominated by European investors, 2003 34

Figure 9: Local and expatriate clients both value performance above all else; corporate clients, meanwhile, look for product features most when deciding on an offshore provider 36

Figure 10: UBS, Credit Suisse, Pictet, LODH and Julius Baer are viewed by their peers as the largest deposit takers in Switzerland, June 2004 42

Figure 11: UBS, Credit Suisse and Pictet are viewed by their peers as the largest funds providers in Switzerland, June 2004 43

Figure 12: Tax amnesties and the Directive will be the most serious revenue threat in the next two years 57

Figure 13: UBP’s fund of hedge funds outperformed the equity markets until 2003 58

Figure 14: Partnerships with intermediaries such as lawyers and accountants will provide the best access to new clients in the next two years 59

Figure 15: Offshore funds will grow moderately to 2006 but deposit growth will be slow 62
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