While Switzerland maintained the throne as the world’s preferred wealth hub, it faces a number of risks to its pole position including the aftermath of the Credit Suisse collapse, according to a Deloitte report.
Switzerland was named as the most competitive global hub, according to the «Deloitte International Wealth Management Center Ranking 2024». This was followed by Singapore, US, Hong Kong and the UAE.
In the fifth edition of the report, Deloitte rated the wealth hubs based on four main criteria: business environment, provider capability, stability, and tax and regulation.
Weakening Inflows
Although Switzerland retained its position as the leading wealth center, as it did in previous editions of Deloitte’s rankings in 2021 and 2018, it saw a slowdown in so-called international market volume (IMV) which is defined as assets that are managed or administered in a location different from the domicile of the asset owner.
«After experiencing a significant drop of 18.1 percent in 2022, IMV in Switzerland recovered by 0.5 percent in 2023 to reach $2.2 trillion. However, while Switzerland remains the top wealth management center globally, asset volumes have languished in recent years while other competing centers (particularly the UK, US and Hong Kong) have seen rising asset inflows,» the report said.
«Switzerland still remains the leading and preferred booking center for European and Middle Eastern clients, but asset inflows from both these regions are yet to fully recover after the collapse of Credit Suisse in 2023.»
Diminishing Edge
According to Deloitte, «Switzerland’s unique selling points have lost some of their value».
Its status as a tax haven has come under increased scrutiny as it was pressured by US authorities to provide data on the bank accounts of American citizens. Its economic and banking market stability was shaken by the downfall of Credit Suisse. And Swiss neutrality has been challenged by geopolitics and the country’s adoption of the majority of the global sanctions.
Runner-Up Center
On runner-up Singapore, the report highlighted its strengths as a highly competitive, neutral business hub with a strong track record for innovation, especially in fintech. The city-state «attracts international clients seeking a stable political and regulatory environment, especially amid regional geopolitical uncertainty».
In terms of downsides, Singapore faces inflation and high debt levels. It has also seen tighter regulatory scrutiny including on anti-money laundering enforcement, in light of the recent $2.3 billion laundering scandal.
Hong Kong's Ranking Slips
Hong Kong’s ranking fell from third in 2021 to fourth in 2024. The report said that its position is nearly on par with the US but it fell short compared to 2021 in areas like fintech, provider reputation, efficiency and regulation. The city also faces challenges from «a less dynamic Chinese economy slowing the pace of investment inflows» as well as political stability, bureaucracy costs and data privacy concerns.
However, it retains a competitive advantage in its talent pool and capital market.