Thomas Steinmetz, a former banker at Coutts, has founded a market place for independent wealth managers, pretty much like a dating platform. He says why he believes the doom and gloom merchants are wrong and what his incentives are for starting his new business.

Mr. Steinmetz, the present situation and in particular the future of independent wealth management in Switzerland are being described in dramatic fashion. You agree with the description of the reality but you disagree about the doomsday scenario.

Yes, I'm annoyed about the destructive view of an industry, which the Swiss financial market owes much – pronouncing its death, being driven into a wall etc. These descriptions don't do justice to the performance and also tradition of the business. It is clear that there will be a massive consolidation in this industry. But this doesn't mean that it will end in those negative scenarios.

These scenarios show that many independent wealth managers simply have to give up.

Yes. The industry hurts from increasing costs, regulation, narrowing margin – much as the private banks too. But the majority of asset managers – an estimated 60 percent – are firms with one to four people and less than 200 million Swiss francs in assets under management. They are faced with the following choice: do I give up, close down or sell up?

A difficult decision if you owned your own business for decades.

The consequences of such as decisions are complex and often underestimated. It is not about the business, it is about customers, who put their trust in an asset manager and in the Swiss financial market. We believe that the process and the consolidation can be managed in a positive way.

That's why you founded the platform.

Yes, customer assets can be offered and sold on this market place.

Please explain in more detail.

At Lan Advisory we have built a data base, which is the heart of the idea. The data base is much like a dating website, where partners are looking for and finding each other. Our data base has two components. One is the personal data of the asset managers. The other component is a list of about 50 segmentation criteria, which are weighed for relevance.

«The perfect fit.»

The criteria refer for instance to the value of managed assets, their origin, the composition of the currencies, the penetration of products, basis points, etc. Weaker criteria are being used to describe the characteristic of asset manager and customer assets in more detail. The data base should be able to sell not only from A to B. We want to match books of asset managers and banks that are the perfect fit.

How does the process of matching actually work?

Potential buyers are able to signal their interest in a specific offer on the platform. We arrange for a contact, both parties then sign a confidentiality agreement and are subsequently able to enter into due diligence and a possible transfer of assets.

Did you evaluate the demand for such a service?

Of course.

What market are we talking about?

There are 2,500 independent wealth managers in Switzerland. Not all of which want to sell or buy of course. We estimate the number of private banks on the demand side at 100. We want to address smaller institutes in particular, because they tend to depend on cheap growth solutions. We expect that some 100 to 250 billion francs in customer assets could be transferred.

And how have banks and independent wealth managers reacted to your offer so far?

Very positively in principal, the offer has been met with keen interest particularly among smaller private banks. They quickly understood that we're offering them a cheap alternative to grow in quality.

«There is nothing like this available on the financial market.»

Among wealth managers, reactions were more mixed, depending on whom we contacted. Our offer obviously makes more sense for older wealth managers than for younger ones.

Millenium Associates, an mergers and acquisitions consultant, operates a similar platform. Are you competing with them?

We aren't competitors form Millenium Associates or other established M&A players. Because we also offer our services for the transfer of smaller customer books of say 10 million francs. The size of the deal is irrelevant to us. We generate demand and supply for the transfer of assets through a highly standardized platform for an acceptable fee. There is nothing like this available on the financial market.

Is the platform live yet?

Yes, our data base is ready and we've become active a couple of days ago.

What about your business model?

We are charging a publication fee and a share of the transaction fee. The size of the fee differs between banks and wealth managers, quite simply because banks will be looking for possible assets with several profiles in the data base.

«High quality – low costs.»

We are thinking about a one-time fee of 3,000 francs for wealth managers and 10,000 for banks. The entry level is pretty low. Both parties are each liable to pay us about 3 percent of the transaction fee – mind you, what counts is the transaction fee, not the total of the sold assets under management.

Which means that your business will only work if you make as many matches as possible.

Exactly. We aim to guarantee a high quality of matches with our data base, to keep our costs, but also those of the parties as low as possible. It means that we will only make contact between the banks and wealth managers willing to make a transaction if we see, based on the segmentation criteria, that the two really fit.

You've been a private banker with Coutts. What makes you want to establish such a business?

Private banking was my life. I did my job with a lot of pride, it made me happy – and I earned very well with it. That's maybe why I feel a sense of responsibility towards an industry, which has undergone extreme change in the past years, to an extent that I probably wouldn't want to be active in it today. I owe the Swiss financial market and that way I can possibly contribute by giving small, independent wealth managers an way to decide about a dignified exit.

Thomas Steinmetz is a former private banker. He was in charge of the Spain business of Coutts until 2009 and head of the international expatriate desk. He became an adviser in 2009.