The Quest for the Forgotten Treasure
“The Quest for the Forgotten Treasure” is the third edition of BCG’s study on the intermediary market in Switzerland and Liechtenstein, continuing the series of studies that started in 2011. In an industry that is facing multi-faceted challenges, intermediaries continue to represent a significant and profitable market segment for custody banks. Several custody banks have devoted less time and money to developing this business in the last decade, almost appearing to forget about the treasure that this important segment represents. This paper touches upon the significant changes the intermediary market is set to undergo over the coming years. Intermediaries now have different demands as a result of these changes, requiring custodians to offer a tailored and sophisticated service offering for separate intermediary segments, adjust their operating model to become more digital and efficient, and revamp the IT infrastructure and systems landscape in order to provide high-quality platform services. By enhancing the value proposition in this way, custody banks can capitalize on the major commercial opportunity which the intermediary space represents. Those custody banks that stand out from the competition in this respect will be in the prime position to re-discover the forgotten treasure and profit from it. In our definition the intermediary market is broader than just external asset managers and family offices. The term does also incorporate fiduciaries, trustees and lawyers. Throughout the report we use the term “EAM” to refer primarily to external asset managers and multifamily offices. The paper reflects the findings of Boston Consulting Group from interviews that were conducted with intermediary and custody bank executives. It enriches these findings with insights from a survey of intermediaries as well as ~10 custody banks, which gathered both quantitative and qualitative information. We would also like to thank VQF for the insightful discussions on the market via CEO Nicolas Ramelet. This study offers a holistic view of the intermediary market in Switzerland and Liechtenstein, with a deep understanding of the market to put current trends and implications into perspective.