Frequently Asked Questions

Why are Swiss Banks so highly regarded?

Swiss banks have earned a reputation around the world for providing sophisticated and discreet banking services. There are about 400 banks in Switzerland, ranging from the “Big Banks" down to small banks serving the needs of a single community or a few special clients. Banks are licensed by the Swiss Federal Government through FINMA (Swiss Financial Market Supervisory Authority), and may operate throughout the country. A number also have offices or other representation in foreign countries. The approximately 400 licensed banks in Switzerland include the Swiss branches of banks which have their headquarters elsewhere.

Why is Switzerland the ideal banking environment?

With 9.1% of global assets under management (AUM), Switzerland is amongst the world’s leading trio of wealth management centres, alongside the United States and the United Kingdom. It is the world’s leader in offshore private banking, with a market share of 27%. The country’s largest banks, UBS and Credit Suisse, rank among the world’s largest wealth management firms.

What are some key facts about wealth management in Switzerland?

Global wealth climbed to US$ 109.5 trillion in 2007 from US$ 99.6 trillion in 2006. Private banking assets held offshore accounted for US$ 7.3 trillion. The amount of HNWI assets has been US$ 40.7 trillion in 2007.

What is a "Private Bank"?

Private banks were not incorporated historically, which meant that the entirety of their partners’ assets was available to meet the liabilities of the bank. However, most have subsequently become incorporated companies, so the term is rarely strictly true anymore. These Private Banks have a very long tradition in Switzerland, dating back to at least 1685 when the Edict of Nantes was revoked. They are primarily associated with portfolio management for private clients. Today, the term "private banking" is used more loosely to encompass all the banking services provided to clients in the area of portfolio and other wealth management services. These services are directed primarily at "high net-worth individuals" and there are a number of "Private Banks" who refuse any account of less than $1 million or the equivalent.

At the end of 2007, AUM in Switzerland (securities holdings in bank custody accounts) reached CHF 5.4 trillion, which is more than ten times the Swiss GDP. Due to the bear market, this figure decreased to CHF 4.1 trillion at the end of October 2008. Swiss banks’ global AUM are estimated at a total of about US$ 10 trillion.

What services do Swiss Banks provide?

Some banks specialize in only a few banking services, whereas others provide a wide range. As in most of continental Europe, individuals usually buy and sell stocks and bonds through their banks. The Swiss banks have a reputation for managing investment portfolios for their clients, and providing other services such as estate planning and wealth management as well as establishing trusts and companies for individual customers.

What is special about Swiss bank secrecy?

Banks in most countries are prohibited from divulging information about their clients and the provisions of the Swiss law follow the same principle. Swiss law is especially strict on any breach of confidentiality, whether in banking or in other commerce. The Banking Act adds a special section which makes it a criminal offense (with the possibility of an individual going to jail) for the bank, its employee or agent to divulge improperly any confidential information. These portions of the banking law have been interpreted, both in practice and by the courts, to make it a serious offense to divulge any information about a bank customer to a third party (including official requests from foreign governments), except in some very special and clearly defined situations. Swiss bank secrecy is reinforced by a constant awareness of the seriousness of the bank's obligation to maintain confidentiality, starting with bank employees having to sign the secrecy portion of the Banking Act as a condition of employment. Both individuals and the banks are prosecuted if a lapse is discovered, which keeps awareness of bank secrecy high and makes lapses rare.

What are numbered accounts?

Numbered accounts, or pseudonym accounts, are not very different from normal bank accounts. The usual account records omit reference to the customer's name or other identifying information, replacing it with a code number or the pseudonym. The relationship between the code number or pseudonym and the actual customer is known only to a few senior managers and their secretaries within the bank. It is important to emphasize that a Swiss bank has an obligation to know the true identity of both the account holder and its beneficial owner, so there is no such thing as a truly anonymous account. Because of the constant awareness and strict enforcement of bank secrecy, there is actually little need for numbered accounts and it should also be noted that they incur additional overheads for the bank because it is more difficult to validate transactions to and from such accounts. For all these reasons, the stories one reads about anonymous, numbered accounts are mostly legend.

How can I open a Swiss bank account?

Simply contact the bank with which you want to do business and request their conditions for opening an account. Typically, a Swiss bank is required by law to know its client sufficiently well to ensure that the funds being placed on deposit are unlikely to be coming from illegal activities. Only Swiss attorneys may open an account on behalf of another person (no other third-party accounts are allowed) and Swiss attorneys must adhere to the same standards as Swiss banks. Swiss laws designed to prevent money-laundering are also very strict. While each bank may set its own internal policies to ensure compliance with the money-laundering legislation, most banks will require a personal interview before opening an account. It should also be noted that small accounts are expensive to maintain and many banks have a hefty minimum deposit requirement for non-residents.

How do Swiss wealth managers fare globally?

Swiss wealth managers offer a wide spectrum of services and business models. At the end of 2007, Switzerland counted 2 global players (with each over CHF 1 trillion AUM and over 10,000 wealth management staff), 9 large players (CHF 100-1,000 billion AUM and over 1,000 staff), 51 medium players (CHF 10-100 billion AUM and over 100 staff) and 79 small players (CHF 1-10 billion AUM).

Have Swiss wealth managers expanded their international franchises?

Swiss wealth managers – especially big banks – have aggressively expanded their international franchises. The stock of capital investments abroad has risen in the past decade by a factor of 6 to almost CHF 87 billion at the end of 2007.

How does Banque Louis differ from other banks?

Banque Louis differs from all its potential competitors by virtue of its South African roots as well as its proven track record of experience and expertise in the property market. We regard property, especially commercial property – retail, office and industrial – as a secure and profitable asset class which reliably offers high returns with low associated volatility or risk. Our extensive experience in property investments will provide the ideal vehicle through which clients can achieve enhanced returns in accordance with their preferences and risk tolerance. Banque Louis is the first South African family-owned private bank in Switzerland. South Africa remains one of the target markets for Banque Louis and this intimate knowledge and understanding of South African culture and people is of great value.