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If one day however the millionaires will compile their portfolio at Amazon, the time for the man in the middle – the relationship manager – is up. Apart from the complicated business with the richest few and some niche segments, the scope for private banking would narrow dramatically.

Already, the times in what used to be the jewel in the crown of Swiss banking are tougher than they have been for a long time. Assets are not flowing as freely as they did before Swiss banking came clean after the tax disputes. The share of assets held by foreign clients has fallen from 55.7 percent to 47.5 percent in the 10-year period from 2008 through 2018. The costs, however, aren’t falling in equal measure – across the board. PwC expects the number of private banks in Switzerland to drop below 100 from a current 130 in the next few years.

Asset Management at Full Throttle

Shareholders seem to have made up their minds already. UBS, the biggest private bank, has dropped about a fifth of its value on the stock market since 2011 when it put its focus on wealth management. Vontobel doubled its value. The Zurich-based company has had asset management as the main pillar of its business for years.

Interestingly, it is asset management that has driven growth at UBS in recent months. It had net new money of $12.6 billion, with the exchange-traded-funds performing very strongly. The cost-income ratio stood at 70.8, while the much bigger wealth management unit had a CIR of 78.7 and net new money of $31.6 billion.

Blackrock Going Strong

At Credit Suisse, the picture is not too dissimilar. Asset management in the third quarter was performing strongly. Of course, asset management at both banks profited from the volumes generated in private banking. But the times when asset management was a mere service unit for private banking are over.

Asset management has also become the subject of a major overhaul and structural change. Margins are under pressure, but those that have positioned themselves well, are reaping the benefits. Blackrock, the No. 1 in the business, generated $429 billion in net new money last year, treble the amount of 2018.

The heads of Swiss asset management see plenty of potential for their business. «With a global, scalable and digital investment offering, asset management will in future play an important role in wealth management,» said Michel Degen, head of asset management in Switzerland, Europe, Middle and Africa at Credit Suisse, to finews.asia.