Zwei Wealth, the rapidly expanding Zurich-based wealth advisor is now moving into the platform business. It is launching a digital tool designed to make family offices accessible to a broader clientele.
To each his own wealth office. That’s the latest promise from the busy wealth advisors at Zwei Wealth. To this end, they are launching a new digital offering that maps the essential functions of independent management on a PC or smartphone, including a chat with the personal advisor and a tool for tendering management orders to asset managers and banks.
«We are democratizing asset management,» Zwei Wealth CEO Patrick Mueller tells finews.com of the company he co-founded the company in 2014 with former UBS chief economist Klaus Wellershoff.
Up to now, family and wealth offices have until now have had precious little to do with democracy, and are considered exclusive even among the super-rich. Those who can afford their own managers for their multimillion and billion-dollar fortunes can truly count themselves in a very rarefied segment of the population. This, and the call for professionalization, has fueled a boom in private wealth managers in recent years, with an estimated 70 percent of billionaires’ assets now under the management of family offices.
If Zwei Wealth has its way, the exclusive hallways of family offices will become more accessible. Contrary to the slogan, however, the Swiss service is not quite for everyone either. Typical Zwei Wealth clients have between 3 and 300 million francs in assets under management and either come from the camp of wealthy private individuals or from organizations and foundations.
Mueller sees millionaires as aspirational billionaires, who in the next five to ten years will also want to have their own wealth office, albeit a less costly one. That growth will be underpinned by a Credit Suisse projection that the wealth of millionaires will almost double in four years. A growth market indeed.
Zwei Wealth is not charging for the digital channel, either from clients or from the wealth managers and banks that are expected to use the platform starting Thursday. «We are aiming for a win-win-win situation for all parties involved,» he says.
Instead, wealth managers compete for tendered assets on the platform and come into direct contact with clients. In return for the free distribution channel, they must follow the Wealth Office’s «rules of the game» and regularly provide asset performance data to the wealth office.
That process has a somewhat analog feel to it as the platform does not claim to map portfolio holdings in real time or made available to clients around the clock. «We offer a meta-level that functions above online banking, portfolio management systems, and banking software intended to provide an overview as well as control over assets. In addition, there is communication with the various service providers that are connected to the platform,» explains Mueller.
According to Mueller, there are now around 400 banks and asset managers; they are potentially the nearly 1,000 customers me around 6 billion francs «assets on platform» of Zwei Wealth. These are highly impressive figures, considering how complicated it usually is to build interfaces between asset managers and banks and how reluctant banks in particular are to make data available to third-party providers. Projects like the digital bank Flynt, which wanted to consolidate the assets of the super-rich, have failed precisely because of these hurdles.
Zwei Wealth circumvents these obstacles. And while the platform is not yet a Rolls Royce, as Mueller admits, but a «work in progress,» the interfaces can be fed automatically or manually, making them accessible to small players. And because everyone benefits from participation and does not pay any direct fees, monetary and competitive concerns are also eliminated.
There is, however, one major difference to traditional asset management. Investors do not have to come to the banks and asset managers as before. They have to come to you.
The Future of Swiss Banking?
Zwei Wealth says it has not skimped on security, and the platform meets all the requirements of the Swiss Financial Market Supervisory Authority (Finma), and the customer alone is the one who decides whether to release data to third parties, Mueller says.
«The advocacy is better, the transparency is always there, the handling is easier and the results are much better,» he says. Because the platform functions as a collector of regulated reporting and IT systems, he believes it can be applied internationally. Therein, Mueller believes, perhaps even lies the future of Swiss banking. «We no longer manage the funds of clients from all over the world, but act as their wealth office.»