Private bank or independent wealth manager: the real differences

As of October 2026. This article is general information and not a recommendation of any provider.

If you have several hundred thousand francs or more to invest in Switzerland, you have two main routes. A private bank offers management and custody under one roof. An independent wealth manager manages your portfolio while it sits at a bank. Both are regulated and supervised. The differences lie in who does what, who earns from what, and who you deal with.

Two business models

The private bank

A bank needs a FINMA banking licence and is supervised by FINMA. It holds your account and securities and usually offers everything else in-house: discretionary mandates, investment advice, lending against securities, mortgages, pensions and succession planning. It earns from fees, from interest margins and, at many houses, from its own investment products such as funds or structured products.

The independent wealth manager

Under the Financial Institutions Act, a portfolio manager is anyone who, on a commercial basis, can dispose of clients' assets in the clients' name and for their account (Art. 17 FinIA). The manager runs individual portfolios and may also offer investment advice and portfolio analysis (Art. 19 FinIA). It is not a bank. Your assets stay in an account and portfolio in your name at a custodian bank, and the manager receives a power of attorney to manage them. Its main income is usually the management fee.

Supervision: both sides since FinIA

Until 2019, independent managers were covered mainly through anti-money-laundering rules and self-regulation. The Financial Institutions Act, in force since 1 January 2020, requires a FINMA licence (Art. 5 FinIA). Existing managers had until the end of 2022 to apply (Art. 74 FinIA), and FINMA received 1,699 applications by that deadline.

Ongoing supervision of licensed managers is carried out by supervisory organisations, which are themselves licensed by FINMA (Art. 61 FinIA). Among other things, the law requires:

• minimum paid-in capital of CHF 100,000 plus adequate collateral or professional liability insurance (Art. 22 FinIA),
• management by at least two qualified people; one is enough only if the orderly continuation of the business is demonstrated (Art. 20 FinIA).

Banks are supervised directly by FINMA, with capital, liquidity and organisational requirements. The Financial Services Act and its conduct rules apply to both, and both must be affiliated with an ombudsman (Art. 77 FinSA).

You can check whether a provider is licensed in FINMA's public lists.

In-house products and conflicts of interest

Both models have conflicts of interest. They just take different forms.

At a bank, the typical conflict involves in-house products. If the bank uses its own funds in your mandate, it earns twice: the management fee and the product fees. The law explicitly treats companies in the same group as third parties (Art. 9 para. 3 and Art. 29 para. 2 FinSO). In 2012 the Federal Supreme Court ruled that intra-group distribution fees must in principle be handed over to the client as well (BGE 138 III 755).

With an independent manager, a conflict can arise from payments by the custodian bank or product providers, for example a share of custody or transaction fees. The same rule applies: a financial service provider may only keep such payments if it has informed you beforehand of their nature and scope and you have waived them; otherwise it must pass them on to you in full (Art. 26 FinSA).

Both must take organisational steps to avoid conflicts and disclose them where disadvantage to the client cannot be ruled out (Art. 25 FinSA). Ask directly which products they use, what share is in-house, which third-party payments they receive and what happens to them.

Custody: where your money sits

At a private bank, management and custody are with the same institution. With an independent manager they are separate: the manager makes investment decisions, the bank holds the assets and executes trades. That separation has a practical benefit. If the manager runs into trouble, your assets remain in your portfolio at the bank.

In both models, the bank rules are the same. Securities in custody do not form part of the bankruptcy estate and are segregated if the bank fails (Art. 37d BankG). Cash balances are given priority up to CHF 100,000 per creditor (Art. 37a BankG); amounts above that are unsecured. With larger portfolios, the choice of custodian bank matters too.

Costs: two invoices instead of one

A private bank usually offers a package, often an all-in fee covering management, custody and transactions. With an independent manager you pay two parties: the manager for management and the custodian bank for custody and trading. In both cases, the running costs of any funds or ETFs come on top.

Which model costs less depends on the offer, not the model. Always compare total annual costs in francs, including product costs, third-party charges and VAT.

An illustration

Assumed round rates for illustration only; real terms vary widely.

For a portfolio of CHF 2,000,000:

• Private bank: all-in fee 1.0 percent (CHF 20,000), plus product costs of 0.3 percent on CHF 1,000,000 held in funds (CHF 3,000). Total CHF 23,000.
• Independent manager: management fee 0.7 percent (CHF 14,000), bank custody fee 0.2 percent (CHF 4,000), estimated transaction costs CHF 2,000, product costs of 0.2 percent on CHF 1,000,000 (CHF 2,000). Total CHF 22,000.

Here the gap is small. A comparison only means something once every item is on the table.

Your contact person: continuity

At a bank you are looked after by a relationship manager. If that person moves on, your relationship is handed over internally. In return, a large organisation with tax, succession and lending specialists stands behind them.

At a small independent manager you often deal directly with an owner or partner, sometimes for many years. The flip side is reliance on a few people. Ask who stands in when your contact is away and what the succession plan is. Where a firm has only one qualified manager, the law explicitly requires proof that the business can continue in an orderly way.

Which model fits when

A private bank makes sense if you want lending, mortgages, pensions and investments with one institution and value a large specialist organisation. An independent manager makes sense if you want custody separate from management, a say in choosing the custodian bank and one long-term personal contact. These are tendencies, not rules: two banks can differ more than a bank and an independent manager.

Thinking Steps helps people with investable assets of CHF 500,000 or more find a suitable private bank or independent wealth manager, using an anonymised comparison of four providers based on your priorities.

Key points

• Private banks manage and hold assets under one roof; independent managers manage your portfolio at a separate custodian bank.
• Since FinIA, independent managers need a FINMA licence, with ongoing supervision by supervisory organisations.
• Both models carry conflicts: in-house products at banks, third-party payments at managers. Both must be disclosed.
• Securities in custody are protected if the bank fails; cash has priority only up to CHF 100,000.
• Compare total costs in francs, not individual fee rates.
• Ask about deputies and succession for your future contact person.