Swiss financial advisors remain optimistic despite the prospect of massive asset transfers in the coming years

Despite these concerns about wealth preservation, Swiss advisors remain confident about the growth of their business. The survey shows that they expect an average annual growth in their assets under management of 8.5 % for the coming year. This confidence reflects their ability to overcome economic challenges and seize new opportunities to drive their growth, even in a volatile environment.

Managing the intergenerational transfer of assets

In light of the ongoing massive transfer of wealth, Swiss financial advisors are under increasing pressure to keep assets within families. 59 % of advisors in Switzerland express fears of losing the wealth of their clients' spouses or heirs. This challenge is exacerbated by the fact that a third of advisors in Europe have already suffered significant wealth losses due to generational attrition.

To prevent this transfer and better manage these risks, 73 % of Swiss advisors state that they regularly discuss family wealth management with their clients. This ensures that the next generations are included in these discussions. However, despite these efforts, assets are only preserved in 50 % of cases when children inherit. This underlines the importance of this challenge. To strengthen wealth retention, Swiss advisors offer additional services such as trust and estate planning (53 %) as well as personalized services such as career planning and networking (56 %). 

Private assetsvalues: An opportunity with great potential, but difficult to implement

One of the major trends revealed by the survey is the growing importance of private assets in investment strategies. In Switzerland, 54 % of financial advisors recognize that these assets are a key way to diversify portfolios and improve returns. However, it is still difficult to build portfolios with private assets on a large scale.

Despite these challenges, 66 % of Swiss advisors plan to increase the proportion of private assets in their clients' portfolios over the next five years to meet growing investor demand for alternative investments. These private assets include, in particular, infrastructure, private equity and real estate, which are seen as a way to better meet diversification needs in a volatile return environment.

Proactive risk management strategies

While sovereign debt is not a major concern for Swiss advisors, unlike some of their European counterparts, other economic risks remain at the forefront of their priorities. In particular, 61 % of Swiss advisors believe that one of the biggest dangers for their clients is the search for quick returns through unfounded market expectations. Especially after prolonged periods of rising share prices. In fact, 25 % of Swiss advisors warn their clients against unrealistic return expectations, which are often influenced by excessive growth expectations.

The survey also shows that Swiss advisors pay great attention to market volatility and how their clients react to these fluctuations. Their aim is to protect portfolios from sudden downturns while enabling long-term growth.

Caution towards new financial technologies

When it comes to new technologies, especially crypto assets, Swiss advisors remain cautious. Although 41 % of them state that they feel comfortable advising their clients on cryptocurrencies such as Bitcoin or Ethereum, the majority (69 %) continue to view these assets with caution and believe that they should not play a central role in diversified portfolios. This reflects a cautious approach to emerging financial technologies, prioritizing the security and stability of investments.

Robert Pavic Urbas, Head of Wholesale for German-speaking Switzerland at Natixis IM, said: "Over the past five years, markets have experienced rapid downturns as well as record highs. While the changes are not always as dramatic, advisors have mastered the art of portfolio management through turbulence and must continue to adapt to the speed and frequency of changing macro and market factors. The biggest challenge for advisors today is keeping current assets in the portfolio. Therefore, they need to adapt their strategies to appeal to the new generation of investors. Finding more time to develop client relationships and offer financial planning services will be critical to the long-term success of their businesses. The survey shows that Swiss financial professionals are prioritizing growth, client retention and managing economic risk, with a balanced but cautious approach to alternative investments and new financial technologies."

Methodology

Natixis Investment Managers surveyed 2,700 financial professionals in 20 countries worldwide. The data was collected between June and August 2024 by the market research company CoreData and additionally analyzed by the Natixis Center for Investor Insights.

About the Natixis Center for Investor Insight

The Natixis Center for Investor Insight is a global research initiative that focuses on the critical issues shaping today's investment landscape. The Center examines the sentiment and behavior, market outlook and trends, and risk perceptions of institutional investors, financial professionals and individuals worldwide. Our aim is to stimulate a more substantive discussion of issues with a 360° view of the markets and insightful analysis of investment trends.

Source: www.natixis.com