New rules should take into account the prospect of equivalence with the EU

According to Grégoire Bordieu, president of ABPS, the issue of access to European markets is as important for wealth management as it is for electricity or medical technology.

Access to the European market, digital transformation and the competitiveness of the Swiss financial center as a whole were some of the topics discussed at the sixth Private Banking Day held in Zurich on Friday. An opportunity to wrap up these various issues with Grégoire Bordier, Partner at Bordier & Cie and President of the Association of Swiss Private Banks (ABPS), one of the speakers for this morning’s presentation.

Among the various topics discussed at Friday’s Private Banking Day was the Unique Selling Proposition (USP) that the Swiss private bank of the future will be able to offer. How would you describe this “USP” – how can money management banks stand out from other institutions?

In terms of client structure, a private bank such as Bordier & Cie has approximately 40% of clients who are residents of Switzerland and 60% of clients from other countries. The same applies to many other private banks. As for the USP that the Swiss players in the field of asset management can offer, this is primarily everything related to Switzerland. It is also about the stability that characterizes Switzerland and its political system, the solidity of the Swiss franc and the security of Switzerland as a whole. This image of Switzerland is still one of the main reasons why some foreign clients trust institutions like ours with their money rather than go elsewhere.
The second aspect is the framework conditions offered by the Swiss financial center, which can count on highly qualified staff with specialists from different fields. Added to this is the reliability of computer systems. Another aspect is the opening of the market for all kinds of players. Whether it’s Geneva or Zurich, the Swiss banking center is very open. There are many players, not only local ones, who offer a very diverse range of services. This is a great asset for wealth management clients.
Finally, I would also mention innovation. Of course, the already mentioned traditional strengths of the financial center are always a significant factor. However, you will also find extremely innovative players in Switzerland in areas such as sustainable finance and cryptocurrencies. Just look at the number of companies operating in this sector in Zug.

Clients of one generation are not always ready to take more risks than clients of the previous generation.

You are talking about innovation. Are the expectations of the new generation of clients, such as those taking over parenting, different from those of the previous generation?

Of course, the new generation is much more accustomed to using all the new means of communication to manage their affairs in all sorts of areas, including when it comes to money management, compared to the generation of 60 years and older. Younger clients are also usually more interested in topics like cryptocurrencies.
However, it should also be borne in mind that some rules remain in force regardless of in which areas the money is invested. From our point of view, cryptocurrencies should be considered primarily as an asset class, even if they are characterized by higher volatility than others. Even the most enthusiastic clients of this asset type are reluctant to invest half of their wealth in cryptocurrencies. They will add placements like crypto or private capital, in successive stages.
I even often noticed that next generation clients are not always more risk averse than the previous generation – sometimes even the opposite! It happens that quite young clients do not want to take risks because they have a specific project to finance, for example, buying an apartment. Sometimes this is also the case because the new generation of clients have less knowledge about finance than the previous generation.

The Private Banking Day was co-organized by the Association of Swiss Private Banks (ABPS) and the Asset Management Association of Swiss Banks (ABG). How are these two associations different from other structures that represent the Swiss financial center, such as the Swiss Bankers Association (SBA) or other groups, such as the one that advocates the interests of retail banks?

The SBA is a body that represents the entire industry and is called upon to take a stand – for example, in relation to Finma or Seco – on certain issues. As for ABPS or ABG, these are structures that deal more with issues related to specific wealth management or asset management professions. For example, we do not take a stand on issues related to mortgages.

Thus, ABPS and ABG remain on the sidelines of all issues of institutional order, for example?

In some specific areas, the Federal Council or Finma contact the ABPS directly to get a position on the issue, even if the latter sends the same request to the ASB in parallel. This was the case, for example, with the law on trusts, on which we were consulted by the Federal Council. However, on issues that are discussed at the interstate level, it is the SBA that plays the leading role, for example, in relation to agreements with the European Union (EU).

Indeed, it is best if possible that the Swiss regulations be brought into line with European legislation.

Negotiations on a framework agreement with the EU have been suspended for more than a year. Is the issue of European market access still as important as it was a few years ago for the asset management sector, or are there other markets that could serve as an alternative?

Our point of view on this issue is that issues related to the Swiss financial center should be placed on a par with other topics currently being discussed with the EU, such as electricity, research or technology, medicine. Access to EU markets is just as important to us as it is to other sectors.

Pending new negotiations, can the strategy systematically adopt the standards defined by the EU, for example with regard to the taxonomy of sustainable finance?

Any new rules or laws must be “equivalent” to EU regulations. Thus, it is indeed better, whenever possible, for Swiss regulations to be brought into line with European law. That is why any new regulation must be made today with this perspective of equivalence in mind. This is what will eventually allow us to have easier access to the EU markets.

Meanwhile, do you see growth opportunities in other parts of the world?

Of course, we also need to have access to and develop into other growing markets, such as those in the Middle East or Asia. It is important to be present in these markets, regardless of current developments with the EU.

In an article recently published on the platform, you noted that the pandemic has led to massive restrictions on freedoms. Now that the risks associated with Covid-19 have faded into the background, outside of China, will we gradually return to the situation before the pandemic – or, on the contrary, do you expect more restrictions to continue? different areas?

After the pandemic, I got the impression that the political evolution has gone in the direction of more restriction and a certain reduction in individual freedoms. But there may be a return of the pendulum – we have already seen this in the past. It is very difficult to predict how the situation will develop.