If you plan to start your own wealth management firm, the time is just perfect now, writes Nicolas Ramelet in an essay for finews.first.

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To work as a relationship manager at a bank or a large wealth manager has its advantages of course. First and foremost, the guarantee of a monthly paycheck, the comforts of comprehensive infrastructure and, last but not least, the familiar environment of your colleagues. You are well looked after – but also directed.

It is fully understandable therefore that every relationship manager at some point asks himself how it would be to work as an external asset manager, EAM for short. But once the next of your clients decides to move to another adviser, you are happy enough to know that this is not going to make an indent in your pocket and you will again enjoy the attractive package provided to you as an employee.

«After all, you don't want to go from bad to worse»

But the thought of being independent will keep gnawing at the level of satisfaction felt about the current situation. The chance to cater to clients following your own philosophy. The notion of being able to decide about everything yourself. Knowing that you are directly responsible for your own success. Good reasons for sure – but as you soon as you are thinking about it, back come the doubts and security concerns.

After all, you don’t want to go from bad to worse and with the specter of Fidleg and Finig lurking around the corner, it seems too risky in any case. The dream of being independent will be postponed again – after all, the reasons against the plan are good enough. Postponed until a later date. Plan B.

«Why not plan A?»

But why plan B? Why not plan A? Right now? There are at least five reasons why you should become independent without further delay.

1. The Swiss financial market is in great shape and the level of trust in Switzerland is at a high globally. The State Secretariat for International Finance (SIF) is reporting solid numbers for all sectors at regular intervals. The financial market receives a lot of attention and support for its positive approach to all things fintech and crypto combined with an equal measure of solid regulation of both. Together with the traditional reputation as a global wealth management center, Switzerland has a label which will strongly benefit any EAM.

«Registering your EAM will become a hurdle starting in 2020»

2. It is true that the introduction of Fidleg and Finig will bring about uncertainties. But it won’t help to wait, quite the contrary: the EAMs that start out after January 1, 2020, will be first to be subjected to the new rules. Companies that set out during that phase won’t be able to profit from lengthy transition periods such as existing EAMs because they will be subject immediately. Even the formal registration of a new EAM at the company registry will become a hurdle starting 2020.

3. The times of change and the new start brought about by Fidleg and Finig will also provide opportunities to establish yourself as a new player, precisely because it's new. As all the existing EAMs have to get their license renewed, the incumbent advantage will be smaller than ever. If you start your business this year you can already take into account the new rules set by Fidleg and Finig.

«A better moment there won't be for a considerable period of time»

4. Many EAMs from the 1990s are about to withdraw from the market and hence there are opportunities to acquire existing client books – with the necessary due diligence – and to develop those further. There are also new business models with platforms and software that lend support to customer relationship management (CRM) and anti-money laundering (AML).

5. Apart from the pull factors mentioned, there is also at least one important push factor to consider. The work as a relationship manager at most banks is getting more and more constrained by rules and safety measures. EAMs decide themselves about their regulatory strategy.

Both worlds have their advantages and disadvantages. Those who think about starting their own should, however, do so now. A better moment there won’t be for a considerable period of time.

Nicolas Ramelet is a lawyer and partner at Mercury Compliance. He teaches at Lucerne University of Applied Sciences and Arts. From 2014 to 2018 he was the CEO of VQF and previously he worked at a law firm in Zurich and at Finma, the Swiss financial market regulator.

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