Investment h0use Vontobel has emerged as the top Swiss private bank in a new index, surprising many in the industry.
The results of the inaugural Swiss Private Banking Identity Index (SPBIx, PDF) are unexpected given the bank’s mixed track record in wealth management.
Vontobel is not traditionally perceived as a pure-play private bank, and its wealth management business has expanded significantly through acquisitions, some of which have sparked controversy.
Controversial Acquisitions
The 2018 takeover of Notenstein La Roche and last year’s acquisition of IHAG raised eyebrows in the market
Vontobel’s private banking division, led by Co-CEO & Head Private Clients Georg Schubiger, has struggled with retaining high-performing relationship managers. A notable example is the exodus of four former La Roche partners in Basel, who left as soon as they were contractually allowed to in 2019, as reported by finews.com at the time.
Problem With High Performers
Similarly, Eastern Europe-focused private banker Eric Benischke, hired in 2020 from Banque Internationale à Luxembourg, departed last year.
With 225,9 billion francs of client assets (30.06.2024), it is the smallest of the larger Swiss private banks, compared to UBS' over 2,5 trillion dollars of private wealth management (PWM) assets, Pictet's almost 700 billion francs and Julius Bär's almost 500 billion francs.
Modest Net New Money
Net new money inflows have been lackluster in the recent past, being about 1 percent in the first half of 2024 and negative in the two previous six-month periods.
Moreover, Vontobel operates with a cost-income ratio of 76,1 percent (first half of 2024), which is one of the higher in the industry—compared to 70,9 percent at Julius Bär, which has been vocal about its cost challenges.
Ranking of 59 Banks
Against this backdrop, Vontobel’s ranking at the top of the SPBIx index raises questions about how the index measures private banking success.
The SPBIx, developed by brand experts Markus Kramer and Jean-François Hirschel, evaluates 59 Swiss private banks based on nearly 30 brand-related parameters.
Identity and Activation
The index examines two primary dimensions: identity, which assesses how clearly a bank articulates its purpose, values, and differentiation; and activation, which evaluates how effectively it translates these attributes into client engagement and market presence.
«Our research establishes a compelling link between strong brand identity and business performance,» says co-author Jean-François Hirschel. According to his analysis, the top-ranked banks in the SPBIx demonstrate significantly higher growth rates in key metrics such as assets under management (AUM) growth and net new money per full-time employee.
The Top 10
The inaugural SPBIx ranking places Vontobel at the top, followed by Pictet and Banque Heritage. The full top 10 ranking is:
- Vontobel
- Pictet
- Banque Heritage
- PKB Private Bank
- UBS
- Piguet Galland
- Zürcher Kantonalbank
- Graubündner Kantonalbank
- Lienhardt & Partner
- EFG International
finews.com reached out to the authors in order to discuss the results, especially Vontobel's. «The top ranking reflects their excellence in brand identity projection and activation based on our 30 objective criteria,» the authors write. «Their clear purpose articulation, coherent value system, and consistent brand activation across touchpoints earned them the highest overall score.»
«Essential Foundation»
They acknowledge that «industry perceptions may differ,» and emphasize that «our methodology strictly evaluates externalized identity, brand and culture elements using publicly available information only.» According to Hirschel and Kramer, «a well-articulated identity is a crucial starting point for future success, and Vontobel has certainly established this essential foundation.»
Critics may argue that the index overemphasizes branding at the expense of operational realities. Private banking success is primarily driven by top-performing relationship managers, not just brand perception. The departure of key talents and the bank’s cost-income ratio suggest that brand strength alone does not necessarily translate into long-term success in private banking.
Nonetheless, the SPBIx provides a fresh lens through which to evaluate Swiss private banks. In an industry grappling with consolidation, rising costs, and shifting client expectations, brand identity and differentiation are increasingly crucial.
Vontobel Reporting
The authors expect that «a robust institutional brand equity» will become «increasingly important as the industry navigates generational shifts and digital transformation, where institutional identity plays a growing role in client relationships.»
A first test of this hypothesis can be expected tomorrow when Vontobel reveals its full-year 2024 financial report.
