Independent asset managers must now redefine their positioning in an environment characterised by consolidation, cost pressures and changing client expectations. According to Carel Huber, their future growth will depend on a more holistic approach to wealth management, truly distinctive services and greater capacity to support families and entrepreneurs.
What are the key drivers and trends currently reshaping the market for independent wealth managers, both in Switzerland and internationally?
The underlying trend, whether in Switzerland or internationally, is the growth of this segment. In Switzerland, we have seen a phase of post-Credit Suisse consolidation, accompanied by a continuous tightening of regulation. We are seeing the same trend in newer financial centres such as Dubai, where the number of legal entities and assets under management are rising sharply. The second major trend is the steady rise in operating costs, which is forcing asset managers to rethink their offering. Two approaches are emerging: specialisation in a niche market, or, conversely, expansion towards a multi-family office model capable of meeting all a client’s needs. Finally, digitalisation is becoming ubiquitous, driven by the quest for efficiency.
How do you explain the difficulties faced by asset managers in the consolidation of the sector?
A sale or merger represents a fundamental change for an entrepreneur. First, they must find a partner who shares the same vision for growth and the same approach to governance, which is not always straightforward. Next comes the question of valuation. There are several models, and from the seller’s perspective, the emotional aspect remains very much a factor, which regularly creates tensions between buyer and seller. Finally, some of the businesses up for sale are sometimes quite old, which reduces potential buyers’ appetite given the challenges posed by the arrival of new generations of customers.
What are the main challenges currently facing independent fund managers in growing their businesses?
Operating costs remain a major challenge, as does digitalisation. But the main issue is the new generations. Their needs are different. They are far less invested in traditional assets and are looking for niche investments, private equity and a more diversified portfolio. Traditional 60/40-style models struggle to meet their expectations.
These generations also expect greater digitalisation and transparency, with the ability to verify information at any time. Furthermore, competition between asset managers is intensifying. Large firms are now approaching the size of small banks. However, this consolidation at the top is accompanied by the arrival of new independent players, often operating under different models – some more specialised, others broader in scope – incorporating property, family offices or even crypto-assets.
How have independent asset managers’ expectations of their custodian bank evolved in recent years?
Five or ten years ago, the model was that of a pure custodian bank, offering ‘execution-only’ services. That model is no longer sufficient. Clients’ needs have evolved, and the banks’ need to remain profitable also requires a rethink of the services on offer. At Mirabaud, for example, we make our wealth management advisers available for estate planning.
In Switzerland, eighteen months ago we launched a service called ‘Advimation’, which combines bespoke research, consolidated portfolio construction and tactical guidance in response to current geopolitical and macroeconomic developments. This latter aspect is particularly well received. Fund managers regularly seek our views on the markets, and we are becoming increasingly proactive in this regard.
Beyond custody, what services now really make a difference in the eyes of EAMs?
High-value-added services are now the key differentiating factors. Multi-booking is also a significant advantage, as end clients are increasingly seeking to diversify their geographical and geopolitical risks. We are fortunate to be able to draw on various centres in Switzerland, Europe and the United Arab Emirates. Digital innovation is also set to play a key role. Next year, we will launch a new platform with a completely redesigned interface. It will offer independent asset managers greater autonomy and efficiency. Finally, our ability to monitor and provide support on regulatory matters is a real draw. We regularly share analyses of regulatory developments with our asset managers.
Why does a private bank such as Mirabaud now regard the independent asset managers segment as a strategic growth driver?
Mirabaud has been working with independent asset managers for around thirty years, and growth in this business has been particularly strong over the last three or four years. This segment now accounts for around 15 to 16 per cent of our assets under management. Our independence and our size enable us to maintain very close relationships with our partners, to be agile in our decision-making and to offer a broad and distinctive range of services. We also have a strong presence in private assets, with niche investments accessible to independent asset managers via club deals, in property or private equity. Our positioning is clear, and the bank’s management has made this market a strategic priority for the medium and long term.
What is your strategy in this market?
We are focusing first and foremost on our priority regions – Geneva, Zurich, Luxembourg and Dubai – as well as on certain Latin American markets where we are well positioned. What sets us apart is the value we add, particularly through our ‘Advimation’ service, our wealth planning solutions and access to club deals, and we are continuing to strengthen our expertise. For example, in Dubai we will be rolling out solutions that comply with the principles of Islamic finance. We also prioritise this multi-booking approach, with the aim of offering a comprehensive service rather than an approach limited to a single entity. A client who entrusts their assets to us in Switzerland must be able to benefit from the full range of our expertise and, where appropriate, access our other offices.
Finally, recruiting talent remains a key driver. We have a strong network, but we are constantly on the lookout for candidates capable of strengthening our presence, both in Switzerland and internationally.
With the arrival of new generations, how should independent asset managers adapt their value proposition?
Their value proposition must evolve to meet the expectations of these new generations, who are less focused on traditional markets and more in search of comprehensive wealth management support. We are moving away from a model centred on product selection towards a much broader approach to wealth management. Clients today wish to hold more tangible assets and gain a better understanding of what they are investing in, beyond listed markets, with a growing interest in direct equity stakes in companies in particular. This shift is gradually bringing private wealth management closer to the family office model, and it is a trend set to continue over the long term.
What characteristics do asset managers who successfully steer their growth have in common?
Those who demonstrate strong growth behave, above all, like true business leaders. Their strategy is clear, their recruitment is targeted, and their vision is shared by all staff. They also place a central focus on business development – an area sometimes given lower priority by certain banks, even though it plays a decisive role in client satisfaction and retention. These managers make bold choices in their markets, develop specific areas of expertise and enhance their offering with high value-added services, particularly in the field of wealth management. Many also support entrepreneurs with complex issues, such as business succession, sometimes with the support of dedicated specialists. Finally, the quality of management remains fundamental. Performance that consistently outperforms benchmarks remains a key factor in building client loyalty.
What do you think the leading independent asset manager will look like in five to ten years’ time?
Organisations will continue to grow, offering ever more specialised services. The best managers will have a clear strategic vision, efficient processes, a solid grasp of regulatory requirements and the ability to attract the right talent. Some smaller players will nevertheless retain their place by specialising in very specific niches. The asset manager of tomorrow will, above all, be a conductor capable of offering a comprehensive wealth management approach, drawing on ever more sophisticated digital tools.