The new CEO of Vontobel Swiss Financial Advisers is confident that the firm can take advantage of increased desire for regional diversification amid turbulent financial markets in the United States.
Billy Obregón, who became CEO of Vontobel SFA and head of private clients Americas in March, told II that the bank’s Swiss and U.S.-compliant accounts appeal to ultra-high-net-worth clients seeking alternatives to the U.S. dollar and financial system.
Joining from Deutsche Bank, where he was responsible for covering U.S. and Latin American clients, Obregón hopes to harness his network to expand the firm’s footprint across the Americas. To gain clients that want more diversification regionally, the firm is focusing on making it easier for them to meet the requirements of multiple jurisdictions.
“We provide clients the ability to open an investment account fully compliant with the SEC and the IRS, but also with Finma (the Swiss Financial Market Supervisory Authority) in Europe for U.S. clients,” he said. Vontobel is providing U.S. and LatAm clients with institutional-quality private investment accounts and help with “diversifying away from U.S. assets and a concentration of regional risk, while providing jurisdictional diversification too.”
Obregón added that because of the changes in the U.S. political environment there is a lot more uncertainty, with UNHW clients considering their options. Switzerland is emerging as a steady alternative.
Pierre Gabris, founder and managing partner of Alpen Partners, a Swiss-based wealth management firm, added that it is fear driving this interest: fear of a $36 trillion national debt that is only growing. “It is unstoppable."
He added that people remain concerned about the Swiss Franc and secrecy. “People see it as complicated. They still worry about what happened with UBS in 2000 [the bank was charged with tax evasion and financial misconduct for its use of offshore accounts and misreporting] and think the Swiss are still hiding money. But people realize that that is all changing.”
Under Finma’s watch, Switzerland has become a highly regulated and transparent market and a safe haven — a far cry from the shrouded secrecy that used to be its trademark and pull. The simplicity of the gold bullion market in the country, given that the precious metal is widely seen as a natural hedge to inflation and volatility, is also attracting potential overseas investment.
Gabris said that on top of family offices and other UHNW individuals showing interest, the firm is also receiving inquiries from institutional investors and endowments looking for diversification away from the U.S. However, one source suggested that recent tax changes in Switzerland, such as the decision in 2023 to implement a 15 percent global corporate tax rate known as Pillar Two, have pushed some investors to search for other options like the Cayman Islands.
Just this week, Switzerland’s inflation rate fell into negative territory for the first time in four years amid speculation that negative interest rates are imminent. The Swiss franc tends to increase as the dollar falls, causing an increase of almost 10 percent against the U.S. dollar to date.
For Vontobel, which acquired UBS Swiss Financial Advisers in 2022 to become the largest such provider servicing U.S. clients, the approach is to provide investment accounts that are fully registered in Switzerland. This means that if there are any extreme shocks to the U.S. financial system clients will remain somewhat protected in so far as they have maintained this geographical diversification.
It goes beyond simply buying Swiss Francs and holding cash, however, with Obregón suggesting that clients layer 10 to 20 percent of their portfolio in the country while maintaining a distribution of equity, fixed income, and private assets, both within Switzerland and across the Euro zone.
“The good news is that we've been doing this since 2004 so we're not a new player in game. We are probably the largest provider of such services, managing over $11 billion AUM in Swiss francs,” he said. “That's why we don't focus on emotional or macro movements, because these tend to change and vary from time to time. We focus on our investment thesis and our value proposition, which goes back to our DNA as an asset manager and provider of investment solutions.”
