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Investor Pulse

Welcome to the latest edition of Investor Pulse, the world’s most extensive survey of behaviour among investors. In this edition we conducted 181 interviews with a representative sample of High Net Worth and Mass Affluent individuals in Switzerland. On average, their investable assets were CHF 1.6 million, and none held less than CHF 500,000. Those questioned gave detailed information on how they viewed their current financial situation and their future. The results afford fascinating insights against the current background of global uncertainty.

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18
countries

28K
individuals

181
interviews in Switzerland

Sentiment

Wealthy Swiss investors are very confident and positive about the future, particularly compared to wealthy investors in other countries.

The figures for ‘confidence’ and ‘comfort’ have risen since the previous survey in 2015, from 35 to 39% and 22 to 28% respectively.
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Stepping out of cash

Saving is a widespread reaction to political instability. Record-low or even negative interest rates – already being passed on to customers in Switzerland to some extent – make no difference. The proportion of cash remains high, accounting for a third of all assets held in portfolios.
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The role of advisers

The more money someone has, the greater the likelihood that he or she takes professional investment advice. Investor Pulse shows that 67% of wealthy investors do take advice. Investment products such as alternative investments are rarely used by investors who do not use an adviser.
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Broadening investor understanding

Only a very few investors state they are well informed about the different alternative investment asset classes; only 4% are very familiar with either commodities or hedge funds, 6% are very familiar with private equity and 10% are very familiar with real estate investment trusts (REITS).
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Retirement

High taxes and the adequacy of future returns worry wealthy individuals in Switzerland. One in four also worries about the quality of advice they receive. All of these factors make it more difficult to plan effectively for retirement.
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Five points to remember

  • 1. Good advisers pay for themselves

    Advisers provide wealthy Swiss individuals with many benefits – provided, of course, they understand their trade. Good advisers make sure their clients have broadly diversified investments. They also increase individuals’ awareness of timely retirement planning which helps instil confidence about their financial future.

  • 2. Fewer missed opportunities

    Wealthy Swiss individuals are not alone in relying too heavily on their cash. Many people want to put cash to one side in uncertain times and simply wait and see what turns up. Since long-term financial objectives like financing retirement represent an important issue for wealthy Swiss individuals, the time is right to look at alternatives to cash. If the aim is to increase one’s wealth, cash offers only very limited potential – particularly in times of record-low interest rates. Anyone holding large quantities of cash may be missing out on better investment opportunities.

  • 3. Home is assumed to be a safe refuge

    What is privately referred to as cocooning – when people retreat into their homes, seeking protection against an ever more uncertain world – can also be observed in investment behaviour. For many wealthy individuals, an investment in Switzerland and Swiss francs is regarded as more secure. They have the sense that they are familiar with the current environment. In doing so, investors are ignoring the fact that they would be badly positioned in the event of a domestic crisis and that regional diversification would reduce risks.

  • 4. Knowledge gives a competitive edge

    In our survey, we saw that many investors know only a little about alternative investments. This lack of know how means that they are sceptical about this investment category and therefore might not be allocating enough of their assets for optimal performance. Portfolios enriched with alternative investments can outperform comparable traditionally-invested portfolios over the long term. It is important to keep investors informed if concerns are to be reduced and confidence built up.

  • 5. How we will increase our long-term assets

    The good news is we will probably live longer and more healthily than our parents and grandparents. But we need to make financial provisions to provide for this. Given the long time period involved, it makes sense to invest smaller amounts regularly, rather than trying to find the ‘perfect’ moment to invest a large amount all at once.

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