The latest Global Wealth Report has warned that Switzerland is set to lose its status as one of the world's top financial hubs by 2026. While the value of assets will not decline in the alpine nation, the Boston Consulting Group (BCG) predicted that Switzerland will be overtaken by the United Kingdom in the near future.
Swiss wealth grew slower than global competitors
According to the BCG, 2021 saw the value of global assets increase at the fastest rate the company has ever recorded. In all, the value of global wealth rose to 530 trillion dollars in 2021, a 10,6 percent increase compared to the year before.
Like last year, Switzerland has the third-largest amount of financial assets in the world, only being beaten by the US and Hong Kong. However, the value of assets held by banks, international companies, entrepreneurs and individuals in Switzerland only rose by 5,5 percent in 2021, almost 50 percent lower than the global average. The BCG found that Swiss assets totalled 4,1 trillion dollars at the end of 2021, and will reach 4,6 trillion by 2026.
Switzerland to be overtaken by the UK Singapore and Hong Kong
According to the BCG, “A notable industry shift is on the horizon when it comes to cross-border wealth management" - something that Switzerland is currently best at. They predicted that in this sector, Switzerland will be overtaken by Hong Kong and Singapore, “Ending a run of more than 200 years of Swiss dominance” in the field.
The BCG explained that places like Singapore and Hong Kong are better placed to capture the Asian market and younger investors, and the UK has successfully made itself a more attractive destination for the wealthy. In all, the BCG forecast that by 2026, Switzerland will be overtaken in the ranking by the United Kingdom, which will hold more financial assets than the banks of Zurich and Geneva for the first time in recent history.
However, this does not mean that the value of assets will decline in the alpine nation, or the country will become a less attractive destination to do business. On the contrary, the BCG predicted that despite geopolitical turmoil, such as the war in Ukraine, 80 trillion dollars worth of new wealth will be created globally in the next five years.