Business Insights and Trends Shaping the Swiss EAM Market in 2023 and the Near Future (Simon-Kucher)

Summary

• The third edition of the External Asset Management (EAM) Market Study surveyed eight renowned Swiss banks across five key dimensions.§1
• Three banks control around 60 percent of the Swiss market, which corresponds to assets under management (AuM) of about CHF 350 billion.§2
• For around 60 percent of participants, EAM is only a small share of their total business, with a low EAM AuM ratio of 0-10 percent.§2
• Banks achieve an average RoA of 45 basis points; three banks are below 40 basis points and two above 50 basis points.§2
• Banks with less than CHF 25 billion in assets under management follow an all-you-can-eat approach, while banks with assets above CHF 25 billion follow a more structured approach.§3
• Half of the study participants have no dedicated EAM price list, and more than one third proactively offer a retrocession-free model while half still include retrocessions in official pricing.§4

Key insights

1. A few players dominate the Swiss and global EAM markets.§1
2. Custodian services, experienced front office staff and flexible pricing are the most important value drivers today.§1
3. In future, user-friendly and powerful digital platforms and highly qualified front office staff will be the most important value drivers.§1
4. Banks with low margins should consider bundling services, as additional services are still offered free or with substantial discounts.§2
5. Small and low-profitability clients should be offered a digital service, while more profitable clients receive personalized service.§3
6. There is a large discrepancy between list prices and the prices actually paid by clients in the Swiss EAM market.§4
7. The retro-free model is increasingly popular in the Swiss EAM market because of higher cost transparency and lower operational effort.§5