Affluent people, in this survey defined as clients with bankable assets between CHF 200,000 and CHF 2millon, constitute around a quarter of Switzerland’s population and so are a sizeable market segment owning nearly 40% of Switzerland’s total of approximately CHF2 trillion onshore financial assets. The projected asset growth (CAGR 2018-2025) of affluents appears attractive with 1.9% for the lower affluent segment (CHF 200,000 to CHF 500,000), and 3.9% for the upper affluent segment (>500,000 to CHF 2million). This study proposes that there are significant business opportunities for Swiss banks focusing on the growing affluent segment.

The Swiss affluent market is sizeable with attractive projected growth and attractive business opportunities for banks (e.g., by building an attractive proposition for the lower affluent segment, or by capturing a part of the healthy market growth of the upper affluent segment). As affluents’ financial literacy appears high, banks may consider offering more targeted educational materials, further increase the discretionary mandate penetration, or increase the (currently low) Lombard and personal loan penetration. In the light of banks’ significant trust premium over internet giants and other new entrants, banks should consider re-defining the role and setup of their branches, and further emphasise safety and security in their marketing materials.

Key pain points for affluent clients

The main concerns (‘pain points’) of affluents in banking and investing, which banks will need to address or risk failing to meet the expectations of their affluent clients:

• Retirement worries keep 59% of affluents awake at night, and 38% look for help from their banks with this complex issue
  

• Bank fees are generally perceived as (too) high, and there is dissatisfaction at having to pay excessive amounts for bank products and services that are commoditised (with a whopping 74% citing low fees as the most important feature a bank may offer)
• Banks’ online portals scored very low in the survey for communication purposes, indicating that affluents currently have a poor omni-channel experience (with 66% expecting a state-of-the-art online banking experience)
  

• Investment advice is often considered irrelevant or mass-produced without adequate personalisation (whereby 41% would welcome investment ideas relevant for them, and 64% would welcome financial planning around life events), questioning the marketing claims of banks to be investment experts

• Sustainability is matter of concern for almost threequarters of affluents, and banks may need to give greater consideration to environmental issues in their own operations and in the products and services they sell
   

No dedicated service models for affluent clients yet

Despite the impressive size, attractive growth and favourable characteristics of the market segment, dedicated service models for affluent clients continue to be relatively rare in Swiss banks. Retail banks seem to treat affluent clients as “large retail clients”, and many private banks seem to accept only affluent clients that are likely soon to become HNWIs.

We believe that banks could do more to address the specific needs of affluent clients by developing targeted products and services at scale, such as mass-customised investment services. We have not yet found any bank in Switzerland that has yet developed a comprehensive marketing approach to the affluent segment, but there are examples of banks successfully developing some initiatives.

Hybrid leaders: building a winning proposition for affluent clients

Building on the characteristics and pain points of affluents that we have identified, we describe five key action areas where forward-looking banks can benefit from attractive opportunities in the affluent market segment and gain an advantage over less proactive peers.