Three years ago, Swiss bankers and asset managers designed a strategy to redefine the domestic financial market as an international center for asset management. The only problem with this fine initiative: Nothing whatsoever has happened since the presentation.

The initiative by the Swiss Bankers Association (SBA) and the Swiss Funds & Asset Management Association (SFAMA) launched at the end of 2012 aims to make Switzerland a hub where investment know-how and resources are made available for institutional investors.

The forces behind the grand plan haven't been slow to proclaim an imminent breakthrough, saying that something really big was taking place behind the scenes. In reality, there's nothing as such – and the industry knows that pretty well. Only, the Swiss Bankers Association vehemently denied the fact that nothing is happening when confronted by finews.ch.

Lack of Vision

But the problems of the plan are obvious: unclear priorities, lack of vision, open questions about financing and concern about making mistakes make progress unlikely for the project, which in itself is most laudable.

The SFAMA is said to prefer taking the lead from SBA, because it is the actual initiator and because the project doesn't enjoy the deserved priority at the SBA. Peter Gruenblatt, the manager in charge at SBA isn't supported well enough to give the strategy the necessary drive.

«Asset management as an issue retains its priority within our organization,» SBA said. However, the association of Swiss banks is aware of the fact that there are «discussions about the timeline», mainly because of unresolved questions about the import of a sufficient number of talents and their settlement in Switzerland following the vote restricting the import of foreign labor in February of this year. «The individual measures aren't in question, but the priority of the measures,» SBA concluded.

CS Has Other Worries

There are two big problems of this project. First, you can't decree such a strategy. Second, the two large banks of Switzerland, Credit Suisse (CS) and UBS, aren't really in charge, even if formally part of the project.

Andreas Schlatter, head of distribution at UBS Asset Management departed in the summer. He had been one to give important input. CS meanwhile has other things to worry about.

A source within the asset management industry, who doesn't want to be identified, said: «The problem is money. For example for an asset management park. The financing necessary amounts to several million francs. It doesn't look as if the money will be made available in the coming years. We need the support of the big banks and we don't receive it in respect to money.»

Helping Foreign Rivals

Swiss banks and asset managers obviously don't want to ease the way for foreign asset managers to expand in Switzerland. They are mainly using the financial market to sell their products without creating any wealth in this country.

There has hardly been any new asset management boutiques in the past years. «The initiative is bound to fail,» said Axel Schwarzer, head of asset management at Vontobel. «You can't create an asset management culture with an initiative.»

Historically, asset management played second fiddle to private banking in Switzerland, with its fixation about banking secrecy. Innovation and performance weren't really that important as long as private banking remained so lucrative. These are however exactly what the Swiss financial market needs, said Werner E. Rutsch, member of the board at Axa Investment Managers.

It makes sense to invest in emerging business segments. For once, the talk isn't about fintech, but sustainable finance, impact investing, micro credits, reinsurance, insurance-linked securities. Switzerland has the perfect conditions to take a lead globally in these segments. But SBA and SFAMA don't seem to see any urgency.

Relocation to London, Dublin, Luxembourg

Consequence: More and more Swiss financial institutes, including asset managers, relocate capacities to London, where a cluster of resources and competence exists and expands. Lower margin activities such as fund management and administration are settled in Scotland, Ireland and Luxembourg.

The asset management unit of Lombard Odier for instance installed significant resources in London and Luxembourg. Pictet Asset Management, Bellevue Asset Management, Twelve Capital and Reyl all are in the process of settling along the shores of the Thames. And Bank Syz has added Edinburgh to London as a place for business.

«It is regrettable that we have to create jobs outside Switzerland,» Yves Mirabaud recently told finews.ch in an interview. The trend will continue.