Vontobel step by step built up its U.S. business over the past five years. The first branch was opened in Dallas, now the Zurich-based bank is evaluating the suitability of three more regions for further agencies, research by finews.ch revealed.

Vontobel is small fry compared with Morgan Stanley, Bank of America or Wells Fargo, giants of the U.S. wealth management business. Under the lead of Deepak Soni (picture), the bank's unit Swiss Wealth Advisors is nevertheless pushing the development of the U.S. activities on.

The bank started its offshore business five years ago in Zurich. Two years ago Vontobel opened a branch in Geneva and in Dallas, moving the bank «onshore».

Fast-Growing Population of Millionaires

The choice was well-founded: Dallas is the city with the fastest-growing number of millionaires in the U.S. A study conducted by Capgemini and Royal Bank of Canada showed that the 113,000 millionaires in Dallas are worth more than 457 billion dollars.

New York is towering over Dallas in terms of the number of millionaires, with almost one million of this sought-after clientel living in the Big Apple. But moving to New York would have put the bank in direct competition to the local and foreign giants. In Dallas it was able to distinguish itself with products that differed from those on offer at local competitors.

Niche Player

The main difference is the global perspective of the investments Vontobel is selling its clients. The U.S. brokers seem to focus on domestic allocations. Vontobel is working in a niche market and Soni, who knows the U.S. banking world from his time at Citigroup, is relying on a team of Swiss private bankers with U.S. experience.

Markus Bruhin for instance used to work for Credit Suisse Private Advisors. Patrice Humbel, in charge of the branch in Geneva, has worked in the U.S. for several years, for Union Bank of Switzerland in Los Angeles and New York, for UBS and later Morgan Stanley in Santa Barbara.

The strategy worked: Since the foundation of Vontobel Swiss Wealth Advisors five years ago, the unit accumulated 1.7 billion francs in assets under management. Having started with five bankers, the Vontobel  unit comprises 25.

Further Branches Under Consideration

The bank long harbored plans to open further branches in the U.S. following the one in Dallas. The plans are now taking hold: Vontobel is evaluating three possible locations, finews.ch research revealed. The first one is the region of San Francisco in California, where the tech-boom created enormous wealth in the Silicon Valley.

Second possible location is Miami – a classic area for private banks. The third is on the East Coast. Vontobel won't however open a branch in New York, which it considers as «overbanked».

The Zurich-based bank is of course present in New York, with its asset management division. Rajiv Jain, head of Vontobel's U.S. unit, is managing more than 50 billion dollars in clients' assets.

Recovering Swiss Private Banking

Vontobel didn't comment on its intentions in the U.S. It merely confirmed that further U.S. branches were being planned for. Swiss private banking is recovering in the U.S. following the massive turbulence and conflicts with the judiciary.

Geneva-based Reyl also plans to open further branches, following the one in Santa Barbara, Reyl Overseas-head Roger Gröbli told finews.ch-TV recently. And Banque Syz has a one in Miami, following its takeover of Royal Bank Canada (Suisse).

40 Are Registered With SEC

More than 40 Swiss companies are registered by SEC and are entitled to serve U.S. clients on- and offshore.

The registered institutes are able to take business with U.S. offshore customers from those banks, which stay well clear of any business in that country. Of course, the U.S. market for private banks may be saturated. But the number of millionaires is still growing at a faster pace than in Europe.

Vontobel already applied for the SEC-registration in 2009. Deepak Soni is convinced that taking care of customers in the U.S. within the legal framework has a future: «Our success has proven us right.»