I took the opportunity while visiting Rob Vrijhof to ask the ex-Swiss banker to give me his candid comments about the present condition of private banking in Switzerland. In fact, I got to know Rob as a Swiss banker prior to his founding WHVP in 1991 when he was the chief portfolio manager for Foreign Commerce Bank in Zurich.

Rob started out by saying that "the constant is change." And, there has been much change in private banking in Switzerland during the 12 years since he worked as an officer of a bank. However, he hastened to add that even with the changes the "most sophisticated banking in the world is still in Switzerland."

I asked him to give me some of his reasons for his strong opinion.

First, he said that the Swiss citizens continue to bank with the Swiss banks. The same cannot be said about the citizens of the Bahamas and the Cayman Islands. Also, Switzerland has never been on any government "blacklist" like the Bahamas and Cayman.

Next, citizens of the world continue to bank in Switzerland. In fact, more then one-third of the offshore wealth of the world continues to find its way to Switzerland. He went on to say that this is because Swiss banks provide a full range of banking services, have fees that are appropriate for the level of service provided and execute transactions on a timely basis with very narrow spreads.

Further, private banks have developed a unique relationship with Swiss independent asset managers. This alliance has brought out the best of the best in private banking and asset management services for the international client. Rob then went on to explain how this relationship works between the client, the asset manager and the private bank.

The international private investor uses an independent asset manager to establish a relationship with a private bank in their name. The bank is the custodian of the funds and keeps them safe. The asset manager invests the funds for the client utilizing the brokerage and other banking services of the private bank. The result is personalized services by the asset manager with the client and the most sophisticated banking in the world.

The asset manager establishes a regular dialogue with the client in order to meet the specific needs of the investor. He speaks with the client at least once a quarter and meets with the client on a regular basis either in the US or in Switzerland. The asset manager charges a flat fee of 1/4 of 1% of the assets under management calculated on a quarterly basis.

The private bank safe guards the funds and enables the asset manager to trade securities, foreign currencies and precious metals in all the markets of the world.
The asset manager can only take out his fee from the client’s bank account and cannot again access the assets except to manage the funds under a limited power of attorney. The bank will charge about 1% for its various services.

This means the bank and the asset manager together charge on average about 2% per year for the best banking and asset management services in the world!

For more information about banking abroad, check the web site, www.swissbankaccount.com.

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