About 200 guests filled the ballroom of the Park Hyatt in Zurich on Friday. The Swiss Association of Wealth Managers (SAM) invited attendees to its annual congress, which was held to mark its 40th anniversary, as finews reported earlier. The atmosphere was good, and the audience was focused.

Vivien Jain, who has led the association operationally since the start of the year, was pleased by the "full house" and painted a picture of a highly fragmented industry. 1,448 wealth managers hold a license. On average, they employ 3.3 staff, serve 68 clients and manage 140 million Swiss francs. "This is really an SME business," Jain said.

Every franc counts

Accordingly, the industry reacts sensitively to rising supervisory costs. Jain referred to WAK postulate 26.4048, which calls for risk-based and proportionate supervision. The Federal Department of Finance (FDF) has set up a working group on the matter. "We will contribute a great deal of constructive input there," Jain promised.

She formulated the guiding question herself: "How can we secure more efficient and less costly supervision for our members?" Her appeal to those present: fill out the VSV survey on regulatory costs. "We need to create understanding of how the costs are evolving."

The outstretched hand

Particular attention was given to the appearance of Daniela Stoffel, State Secretary for International Finance (SIF). Asset managers had recently expressed dissatisfaction with the growing regulatory burden, for example with the Finma supervisory levy or with the too-big-to-fail bill, whose impact on smaller firms Jain recently criticized in a comment on finews.

State Secretary Daniela Stoffel. (Image: SIF)

Stoffel responded with an invitation. Regulation follows the principles of proportionality and efficiency. "What we need from you is not only the cost side, but also insight into the benefit side," she said. And further: "Stand up for yourselves! Get involved. Show us when we make mistakes too."

Copy-paste is not gold

The Swiss process is designed so that everyone can take part. "As cumbersome as it is, it is part of Switzerland's success formula." Stoffel has little patience for copy-and-paste submissions: "A thoughtful, interesting, value-adding response in a consultation is worth its weight in gold." She illustrated how sluggish companies sometimes are in responding to the authorities' outstretched hand with a survey on too big to fail among cantonal banks. Only two had replied.

Specifically, Stoffel pointed to the working group on optimizing financial market regulation. It is due to present its report by next summer. What is needed there are not the "policy people," but practitioners from the front line.

Taxes yes, AI no

In parallel, the SIF is working on a capital market analysis. In doing so, it will "not shy away from the tax issue," even though an attempt to abolish the stamp duty recently failed. The SIF is also preparing stablecoin regulation.

As for artificial intelligence (AI), Stoffel sees no need for regulation "from the financial center's perspective alone."

A tightrope walk over four fault lines

The intellectual highlight of the event was provided by Andreas Schrimpf, Head of Financial Markets at the Bank for International Settlements (BIS). In an analysis marked as his private opinion, he dissected the biggest threats looming from the market side. He assigned them to four "tectonic shifts": AI, sovereign debt, nonbanks (above all leveraged hedge funds), as well as geopolitics and the dollar.

Bird's-eye view: BIS economist Andreas Schrimpf. (Image: Barbara Werren)

The major AI firms invested around 670 billion dollars in 2025, increasingly on borrowed money and off balance sheet. The seven largest stocks account for 35 percent of the S&P 500, compared with 22 percent at the end of 2022. In terms of valuations, the market is still far from the dot-com bubble, "but in terms of market breadth, it is close to dot-com levels." Schrimpf said: "Our concern is that excesses could emerge in financing."

Debt on the scale of the postwar era

Median government debt in advanced economies stands at 78 percent of gross domestic product, as high as it was only during and after the world wars. "We see no efforts to reduce government debt," Schrimpf said. Switzerland is one of the few exceptions. At the same time, interest rates are rising broadly, "even in Japan." Markets do not expect a return to ultra-low interest rates.

Who buys the debt makes the matter more precarious. Foreign central banks, long the price-insensitive anchor in the market for U.S. government bonds, have barely been net buyers since 2012. Their place is being taken by hedge funds, whose gross leverage is at a record high of 8.6 times. "There is a lot of leverage in the system, which makes the markets unstable," Schrimpf warned, recalling the British gilt crisis in the autumn of 2022.

Hedge funds through the roof. (Image: finews)

When the dollar no longer smiles

The dollar continues to dominate the financial system. Yet the so-called "dollar smile," the currency's appreciation in times of stress, failed in April 2025: the dollar fell alongside equities. For Swiss investors, hedging the dollar currently costs 4.5 percent per year. And bonds no longer hedge equities when inflation is driven by supply-side factors. Even gold has recently behaved more like a risk asset. "What alternatives are there? Not many, really."

His conclusion was mixed for the audience. "Switzerland has been a remarkable haven of stability throughout all of this," Schrimpf said. But one cannot invest exclusively in Switzerland; and given the partly new correlations in financial markets, the traditional principles of portfolio construction are in some cases being called into question. 

From the stage to the workshops

In the subsequent panel moderated by Markus Wintsch (Swisspartners), Michael Bolliger (UBS), Reto Hintermann (Julius Bär), Patrick Huber (LGT), Michael Iten (Vanguard) and Daniel Rupli (Lombard Odier) discussed the future of portfolio management.

Insights from the workshops (from left): Alexander Rabian, Jan-Egbert Sturm, Beat Wittmann and Michel Girardin. (Image: Barbara Werren)

The audience then split up into three thematic workshops. Attorney Alexander Rabian of Streichenberg addressed compliance and risk management in outsourcing. Jan-Egbert Sturm from ETH Zurich's KOF Swiss Economic Institute provided an assessment of macroeconomic developments. Michel Girardin (University of Geneva) and Beat Wittmann (Porta Advisors) explored how to invest in a fragmented world and in the age of AI.

The findings were then briefly discussed in plenary before the asset managers headed to the networking lunch in the foyer.