In Switzerland, an increasing number of consumers are turning to digital solutions to independently build wealth and prepare for their future retirement life. A new study conducted by the Lucerne University of Applied Sciences and Arts in collaboration with Raiffeisen Switzerland and Vontobel found that not only is awareness of these new solutions high, but usage is also growing steadily.

A survey that ran in November 2022 and which polled more than 1,000 individuals residing in Switzerland found that more than two-thirds (72%) of these respondents were aware of digital retirement planning and investment solutions, up 11 percentage points from 2020’s 61%.

Percentage of Swiss residents aware of digital investments and retirement planning solutions, Source: Digitales Anlegen und Vorsorgen in der Schweiz: Trends, Bedürfnisse und gewünschte Produkteigenschaften, Lucerne University of Applied Sciences and Arts, Raiffeisen Switzerland and Vontobel

Usage of these digital solutions is also booming with penetration soaring from a mere 8% in 2020 to 20% in 2022, the study found.

Younger men from the German-speaking part of Switzerland with experience with securities were found to be the biggest adopters of digital investment and retirement planning solutions. However, interest among female investors is growing with 36% of surveyed women considering investing through a digital solution.

Usage of digital investment and retirement planning solutions among male and female investors, Source: Digitales Anlegen und Vorsorgen in der Schweiz: Trends, Bedürfnisse und gewünschte Produkteigenschaften, Lucerne University of Applied Sciences and Arts, Raiffeisen Switzerland and Vontobel

Demand for digital investment and retirement solutions is expected to continue growing rapidly as interest surges. In 2022, 41% of the respondents polled said they would consider using digital offerings, up by a notable 25 percentage point compared to 2020’s 16%.

Swiss investors’ preferences

The study, which also looked at consumers’ preferences and desired features when using digital investing and financial planning solutions, found that Swiss consumers are demanding sustainable solutions as well as personalized offerings.

48% of respondents indicated that the ability to invest in sustainable assets is important, followed by the availability of a wide range of investment opportunities and assets (40%). In addition to stocks and bonds, investors also showed high interest in alternative asset classes such as real estate, gold, and other precious metals.

Swiss investors’ preferences and what they consider being important in a digital investment and financial planning solution, Source: Digitales Anlegen und Vorsorgen in der Schweiz: Trends, Bedürfnisse und gewünschte Produkteigenschaften, Lucerne University of Applied Sciences and Arts, Raiffeisen Switzerland and Vontobel

Results also reveal that most individuals don’t want to be attributed a standard portfolio but instead want to put their own personal touch on it. However, only few solutions allowing personalized investments currently exist in the market. Theme investments are also particularly sought after, the study found.

When choosing a provider of digital investment or financial planning solutions, respondents named transparency over costs (73%), access via e-banking (58%), transparency about the investments in the portfolios (57%), prices (47%), and the reputation or brand of the provider (40%) as the five most important criteria.

Criteria Swiss residents consider important when choosing a provider of digital investment or retirement planning solutions, Source: Digitales Anlegen und Vorsorgen in der Schweiz: Trends, Bedürfnisse und gewünschte Produkteigenschaften, Lucerne University of Applied Sciences and Arts, Raiffeisen Switzerland and Vontobel

Switzerland’s digital investment and financial planning landscape

Awareness and adoption of digital investment and financial planning in Switzerland is rising on the back of a rapidly expanding industry.

According to the report, the number of solutions in the digital investment sector increased steadily in recent years. In 2023, the market was home to over 50 solutions, more than double the number observed in 2020. The most prevalent business models currently are robo-advisory and hybrid models, the research found, and traditional banks are playing a central role in the digital wealth management landscape.

Overview of digital investment and pension solutions in Switzerland, Source: Digitales Anlegen und Vorsorgen in der Schweiz: Trends, Bedürfnisse und gewünschte Produkteigenschaften, Lucerne University of Applied Sciences and Arts, Raiffeisen Switzerland and Vontobel

According to statistic portal and data platform Statista, the global robo-advisory market managed approximately CHF 1.8 trillion in assets in 2022.

The US lead the market with CHF 1.11 trillion worth of assets under management, or 61% of the global market, followed by China, Japan, the UK and Italy. These top five countries collectively account for approximately 783% of the global robo-advisory market.

The Swiss robo-advisory industry lags behind global leaders with managed assets of CHF 4.41 billion in 2022.

Featured image credit: edited from freepik