In addition to lower market valuations, Vontobel's institutional clients remain cautious about new investments. But wealth management was a bright spot.

Vontobel's assets under management dropped by 42.5 billion Swiss francs ($43.4 billion) to 201.2 billion at the end of September, compared to the start of the year, the Zurich-based firm said Thursday.

«Lower stock market valuations and the wait-and-see attitude of institutional investors have also had a significant impact at Vontobel that was only partly offset by the good performance of our business with private clients. There are no signs of a change in the market environment. Uncertainty as well as rising interest rates and high rates of inflation are continuing to affect markets. Despite this, we are continuing to focus on our mid-term targets,» CEO Zeno Staub said.

Bright Spot

Nevertheless, there was a bright spot in wealth management which Vontobel said experienced strong inflows of assets from all of its focus markets. In the third quarter, net new money had overall outflows of 2.5 billion francs, of which asset management saw 3.3 billion outflows. This was partially offset by 900 million francs of new money into wealth management.

Through the first three quarters of the year, overall net new money contracted by 3.4 billion francs. Asset management outflows were 7.3 billion, while wealth management attracted 3.9 billion during the period. 

Cost Controls 

Wealth management is one area of the financial services industry that seems to be recession-proof. Earlier today, a report from Bain & Co. said that the fat years of wealth management are just beginning, as finews.com reported.

With the deteriorating market conditions, Vontobel is undertaking additional cost control measures, resulting in between 40 to 70 million in operating expenses for this year than last year's 1.07 billion francs. Moreover, the firm «will not increase headcount for the time being.»

With those measures, Vontobel will generate a further 65 million francs of gross cost reductions by the end of next year.

Growth Targets Maintained

Vontobel’s growth and income targets remain unchanged for the period to 2024 with 4 to 6 percent overall business growth annually across the cycle. Annual growth for net new money is also targeted in a range of 4 to 6 percent. It aims to generate a return on equity of at least 14 percent and achieve a cost/income ratio of less than 72 percent.