Syz Urges Swiss to Keep Diverse Wealth Hub in SwitzerlandGiles Broom
Swiss banks seeking to compensate for the loss of financial secrecy by setting up operations abroad risk eroding the multinational appeal they enjoy at home, Banque Syz & Co. SA said.
“Even if it is legitimate that Swiss private banks should establish local operations in some countries -- whether their aim is to get as close as possible to their clients or to adapt to the constraints of cross-border activity -- it remains essential in our view to keep and develop international wealth management business in Switzerland,” directors said in the Geneva-based bank’s annual report.
Swiss banks are investing in emerging markets and lobbying for equal access to European markets as the country prepares to implement the U.S. global standard on asset disclosure and as the Swiss government holds talks with other countries on the automatic exchange of bank account information.
The surge in private-client wealth in Asia prompted Zurich-based Julius Baer Group Ltd. to acquire non-U.S. Merrill Lynch wealth units from Bank of America Corp. in 2012. More mature markets such as London may also offer opportunities for Julius Baer and Swiss financial firms including UBS AG, Credit Suisse Group AG and Pictet & Cie. Group SCA.
In Syz & Co.’s annual report, the board outlined concerns that Swiss banks will overreact to tougher rules on cross-border wealth management and lose their competitive edge as a result.
Companies following single-country market strategies with “mono-culture” business models, may wear away Switzerland’s international and multicultural client base, the report said, without referring to specific firms. Likewise, the costs and regulatory challenges of establishing new operations abroad may be prohibitive for smaller banks, the report said.
Syz & Co., established by Eric Syz, 56, and two co-founders in 1996 to manage money for individuals and institutional clients, said Swiss banks are prepared to oversee only tax-compliant assets in “a new era of administrative transparency.”
Syz & Co. doubled net income and increased client assets under management to 28.7 billion Swiss francs ($32.6 billion) last year. Eric Syz acquired the stakes of co-founders Alfredo Piacentini and Paolo Luban last month and told employees he has no plans to sell the firm.
Syz & Co. has other offices in Switzerland and in Europe, including the U.K., Luxembourg, Italy, Spain, as well as in Hong Kong and the Caribbean.