Does distance make a difference?

Trust is a key factor when establishing a relationship with a wealth manager or an investment advisor. Does distance make a difference?

Do investors feel more comfortable with a local US advisor with offices downtown...even if they ever, or rarely, drop by the offices for a chat or grab a lunch together? Does picking up the phone or writing an email feel better with the knowledge that the wealth manager or investment manager is active in the same time zone?

Home-bias is understandable but...

Home-bias is understandable, it is what US investors know in-and-out. It is a level of comfortableness that, to a certain degree, "dulls the senses" preventing action-taking on opportunities just beyond the "comfort zone". There is no tangible reason to ignore international and jurisdictional investment diversification.

"Home country bias can come at a heavy cost as it can significantly reduce portfolio diversification by increasing geographic, economic and sector concentration risks."

Taking the first step towards Switzerland

Naturally, a personal introduction, a recommendation from a trusted US advisor, a colleague or a family member already established in Switzerland helps to break the ice. However, US investors can take their own initiative too.

Swiss wealth managers focused on providing wealth management services, specifically discretionary and advisory investment management mandates, to US clients, are registered with the Securities and Exchange Commission in the United States. To get started, US investors can do their homework and read the SEC ADV Part 1 containing information about the Swiss wealth manager's businesse and if there have been problems with regulators or clients. Section D includes information on the foreign financial authorities the Swiss wealth manager is registered with. The ADV Part 2 Brochure describes, in a narrative format, the manager's business practices, fees, types of clients and more. Note: Before you hire an investment adviser, from the US or in Switzerland, always ask for, and carefully read, both parts of the Form ADV.

A natural next step is to take a look at the Swiss wealth manager's website to get a touch and feel for their approach to American clients. Trust often begins with a positive first impression. A short-list of personally appealing Swiss wealth managers can be made and contact established. Many Swiss wealth managers travel to the US regularly and are happy to meet with US clients personally to discuss needs, opportunities and future developments. Some companies even have offices in the United States to provide a "close to home" feeling.

Some US investors are excited to make a trip to Switzerland to visit their chosen wealth manager and their offices to get a first-hand feeling of Switzerland as a second home for a portion of their overall assets, as well as seeing the sights and enjoying the fine dining Switzerland has to offer. A lunch in Zurich, Geneva or Lugano with a dedicated English-speaking Swiss relationship manager is a nice change to a local downtown restaurant.

Not more than a phone call or click away

A Swiss SEC-registered wealth manager is not more than a phone call or a click away. A video chat makes 5,000 miles disappear, it feels like right next door. An initial conversation will shed more light on how your specific needs can be fulfilled and will strengthen the feeling of trust, despite the distance. More in-depth discussions will fortify the bond. Trust is not a given but needs to be earned and maintained.

By the way, opening up a custodian account with a Swiss bank is much the same as opening up an account in the US...with the Swiss wealth manager to guide the way and simplify the process.

Why $ 1,000,000? The majority of the Swiss wealth advisors serving US clients have a preferred amount of investment of $ 1 million to make international diversification worthwhile. However, some have a lower or a higher minimum amount of investment.

There are differences!

A Swiss wealth manager, with an ingrained international upbringing and years of education, training and experience will bring different perspectives to the table. Being at least six hours in action before the US markets open, creates a headstart. Multi-currency, internationally-diversified investment portfolios are the bread-and-butter of what they do everyday, yet their efforts are specifically geared to the US investor. Naturally, an investment portfolio in Switzerland should complement a US-based portfolio already in place back home and not compete with it. However, a globally-diversified portfolio can also include US investments to round off the international holdings. A Swiss account also gives globally mobile investors access to funds outside of the US.

Switzerland has an element of safety, underlined by long-term political and economic stability and neutrality, the acknowledged AAA-rated, "safe haven" quality is unmet by other countries. Swiss wealth managers and client relationship managers are also appreciated for their very personal service, reliability, preciseness and availability, ready for a phone call outside of Swiss office hours to accommodate the US investors' US schedule. A professional relationship with an independent Swiss wealth manager often evolves into something more personal and long-term...the US client is not viewed as simply another account.

There is strength in knowledge

With knowledge comes strength and with strength, trust can be established and evolve in the long term, the 5,000 miles away are just a "Katzensprung" (= a stone's throw).

Switzerland was established in 1291. That's long term!