Credit Suisse is the tale of a collapse foretold. Even in its core wealth management business, the decline has been very apparent for 15 years now, writes Bernardo Brunschwiler in a piece for finews.first.
This article has been published on finews.first, a forum for authors specializing in economic and financial topics.
On the international stage, the events surrounding the demise of Credit Suisse are prompting a loss of trust in both clients and potential clients in Swiss banking. I have just spent a few weeks in Latin America and I notice this – unfortunately – every day.
For many, the «CS-Story» is a total reputational disaster for our country and the Swiss financial center. Headlines like «El colapso del Credit Suisse jaquea la confianza en Suiza» or «Suiza ya no es lo que era: la crisis del Credit Suisse hundió su prestigio» in two of Argentina's most important newspapers prove that.
«No one has probably ever calculated how much shareholder value was destroyed then»
I am probably not all that objective about everything given I formerly headed the Latin American business of Clariden Leu, a former Credit Suisse subsidiary. But even during the integration in 2011, I had the impression that Credit Suisse management was making a mistake and had made a relatively «arrogant» assumption that fully coopting Clariden Leu was the best thing to do for the group as a whole and clients.
No one has probably ever calculated how much shareholder value was destroyed then. It was certainly never communicated in any case.
«Generally, in reality, you can never really replace competent people»
Over the years, Credit Suisse constantly lost experienced client advisors, even whole teams. Generally, in reality, you can never really replace competent people. Even the plan in 2021 to hire an additional 500 advisors failed, as I indicated in my 2021 piece.
But things were not always this bad for Credit Suisse. For many years, the bank was a clear reference point for Swiss private banking. I still remember when I got my first job there in 1982 and how impressive the bank's presence was then and how successful the firm was in Latin America.
«Switzerland will be a clear loser in the international wealth management business»
That this very same Credit Suisse is the one that has been in this downward spiral, careening from one scandal to another, has an alarmingly deep negative impact on the entire Swiss wealth management industry.
If the finance hub, the Swiss Bankers Association, UBS, and every single bank and wealth manager do not manage to restore that trust in the next few years with hard work and a serious, professional effort, while staying close to clients, Switzerland will be a clear loser in the international wealth management business.
«Wealth Management is a people business»
It might be a good time to remember that wealth management is a people business and one in which the advisors play a decisive role with their expertise – and deep knowledge of the countries and clients they are responsible for.
Bernardo P. Brunschwiler, lic. oec. HSG, grew up in Argentina. Starting in 1982, he got his start in Swiss banking with Latin American clients – first at Credit Suisse and BSI (1983-1991), based in Zurich, Lugano, Buenos Aires, and New York. Between 1994 and 2004, Brunschwiler worked for Swiss Bank Corporation (later UBS) and was responsible for its wealth management in Latin America. Starting in 2006, he became an independent consultant. In 2010/11 he worked for Clariden Leu and from 2014 for PKB Privatbank. He founded Bernardo Brunschwiler Consulting in 2012 in Zug.
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