Affluent banking: targeting the wealthy middle class

Swiss banks are sitting on an untapped treasure. While they focus intensively on retail clients and wealthy private clients, a lucrative segment remains largely unnoticed: the wealthy middle class with assets of between CHF 200,000 and CHF 2 million. This group makes up a quarter of the Swiss population and holds 40 percent of all onshore assets. Why do so many financial institutions leave this potential untapped? The answer lies in outdated business models and a lack of targeted strategies for the affluent segment.

The most important facts at a glance

• Affluent customers are people with bankable assets of between CHF 200,000 and CHF 2 million - the upper middle class
• Market potential : 25 percent of the Swiss population collectively own CHF 750 billion (forecast to 2025)
• Main needs : Low fees (74 percent), retirement provision (59 percent) and seamless digital services
• The paradox : 71% significantly overestimate their own financial expertise
• The opportunity : Banks have not developed a comprehensive strategy for this growing segment
• Successful solution : hybrid models combine personal advice with digital efficiency

What is affluent banking and why is it gaining in importance?

The term “affluent” comes from the English language and means wealthy. In banking, it describes the customer segment that lies between traditional retail customers and high net worth individuals (HNWIs). This upper middle class has sufficient capital to benefit from professional wealth management, but does not reach the threshold of traditional private banking.

Swiss banking is characterized by three client segments: retail clients with assets under CHF 200,000 receive standardized products and self-service solutions. Affluent clients are in the zone between CHF 200,000 and CHF 2 million. Private banking clients with assets of over CHF 2 million enjoy highly individualized support from dedicated relationship managers.

The demarcation varies depending on the institution. Some banks already define mass affluents from CHF 100,000 in order to broaden the target group. The lower affluent segment (CHF 200,000 to CHF 500,000) differs from the upper segment (CHF 500,000 to CHF 2 million) in terms of the intensity of advice and product complexity.

The affluent segment in Switzerland: a market worth billions

The figures speak for themselves. Around a quarter of the adult Swiss population belongs to the affluent segment. These well-funded clients account for almost 40 percent of the country’s onshore financial assets of around CHF 2 trillion. This corresponds to an impressive volume that will grow to around CHF 750 billion by 2025.

The growth forecasts appear attractive: the lower wealth segment is growing at an annual rate of 1.9 percent , while the upper segment is growing at an annual rate of 3.9 percent. This healthy market growth offers significant business opportunities for financial service providers willing to develop customized solutions.

Particularly noteworthy: around 500,000 wealthy private clients in Switzerland are foregoing the tax-privileged pillar 3a. As a result, they miss out on considerable tax savings and returns year after year. Those who fail to act are giving away money.

Reading tip : Customer acquisition for financial advisors: How to win new customers

The affluent middle class: needs between aspiration and reality

What issues really concern affluent customers? Planning for retirement clearly tops the list with 59%. Family maintenance follows with 45 percent. These priorities remain surprisingly stable - even global crises such as the war in Ukraine or rising inflation do little to change this.

When choosing a bank, one thing counts above all: lowfees. For 74 percent of respondents, this is the decisive factor. At the same time, they want seamless banking services across all channels - from online banking and mobile apps to personal advice. This omnichannel expectation poses challenges for traditional institutions.

Trust in established financial institutions remains high. 76% of wealthy private customers trust their traditional bank. Only 8 percent would entrust their money to a technology company. Despite this level of trust, only 25% actively use advisory services and only 21% mandate their bank to manage their savings. As many as 35 percent process orders such as share purchases without any advice.

Sustainability is gaining in importance. 72 percent of Affluent customers state that ESG criteria are important to them. However, only 12% actually invest more than half of their assets in sustainably labeled assets. The gap between desire and reality could hardly be greater.

The dangerous misunderstanding: when self-confidence meets gaps in knowledge

The affluent segment is characterized by a remarkable paradox: 71% are convinced that they can assess what level of risk they should take. Almost two thirds (63%) believe that they can have a competent say on financial issues. More than half (55%) trust their own investment skills.

The reality paints a different picture. Only 28 percent have set themselves clear return targets. Only 16 percent really understand more complex financial instruments such as derivatives. This discrepancy between self-assessment and actual competence is more than just an academic problem - it leads to costly mistakes.

Investment behavior reveals further contradictions. 75% invest their money in shares , but only 48% use funds orETFs, which would be ideal for diversified portfolios. The so-called Dunning-Kruger effect seems to be in full effect here: people know just enough to be dangerous for their own assets.

Particularly serious: 31 percent do not have apillar 3a account. This means they are foregoing considerable tax advantages and the opportunity to build up long-term wealth. This clearly shows how overconfidence combined with knowledge gaps can lead to measurable opportunity costs.

Reading tip : Financial advice for families: the 5 most important challenges

Why traditional banks neglect the affluent segment

Most Swiss banks have not developed a dedicated strategy for affluent private clients. Retail banks often treat affluent clients as “large private clients” and only offer them standardized products. The advisory capacity is often insufficient to address individual needs.

Private banking institutions are cautious. Many only accept affluent clients if they are likely to become HNWIs in the near future. The asset threshold of CHF 1 to 2 million for traditional private banking remains out of reach for most affluents. They therefore fall through the cracks.

The traditional cost-benefit calculation plays a role. Personal advice from highly qualified relationship managers is expensive. For medium-sized assets, the margins appear too low to justify the expense. However, this way of thinking ignores the enormous overall potential of the segment and the possibilities of digitalization.

A lack of digital infrastructure makes scaling difficult. Many institutions have not sufficiently automated their processes to enable efficient mass customization. The poor integration of different customer channels leads to suboptimal customer experiences. Where retail seems too impersonal and private banking too costly, there is a gap that innovative providers can fill.

Private banking vs. affluent banking: more than just asset limits

Criterion	Retail banking	Affluent banking	Private banking
Assets	< CHF 200,000	CHF 200,000 - 2 million	> CHF 2 million
Advisory model	Self-service, standardized	Hybrid: digital personal	Dedicated relationship manager
Fee structure	Low, flat rate	Moderate, transparent	Premium, individual
Product complexity	Simple (funds, ETFs)	Medium (structured, diversified)	High (derivatives, alternative assets)
Frequency of contact	When required	Regular, flexible	Intensive, proactive
Digital services	Primary	Equivalent to face-to-face	Complementary
Minimum investment	None	From CHF 200,000	From CHF 1-2 million

The difference between Private Banking and Affluent Banking lies not only in the asset threshold. Private Banking offers highly individualized solutions, access to exclusive investments and comprehensive services ranging from estate planning to art consulting. A personal advisor is available at all times.

Affluent Banking focuses on intelligent scaling. Investment advice for wealthy clients combines standardized, cost-efficient processes with the opportunity for personal discussions on important decisions. The wealth strategy for assets of CHF 250,000 or more uses digital tools for routine tasks and saves human expertise for complex issues.

This hybrid approach significantly reduces costs. While private banking charges annual fees of 0.8 to 1.5 percent, the costs in affluent banking are typically between 0.4 and 0.8 percent. At the same time, clients gain access to professional investment strategies and scientifically sound portfolios.

Successful approaches: How affluent banking works

Mass customization is the magic word. This refers to the ability to deliver mass customized investment solutions. Modern technology makes it possible to analyze customer profiles in detail and automatically suggest suitable strategies. What was previously reserved for wealthy private clients is now accessible to the upper middle class through scaling.

Hybrid models combine the best of both worlds. They offer the efficiency of digital processes for day-to-day business and personal advice for important life decisions. Customers can view their portfolio, carry out transactions and call up reports at any time via mobile apps. At the same time, a qualified advisor is available if required.

Artificial intelligence and big data are playing a growing role. By analyzing customer data, it is possible to anticipate needs and proactively make relevant suggestions. Risk profiles are created more precisely, rebalancing is automated and tax optimizations are systematically identified. Technology becomes a tool, not an end in itself.

Transparent fee models create trust. Simply structured, understandable costs are easy to communicate and avoid nasty surprises. All-inclusive fees with no hidden costs meet the need for clarity. This transparency distinguishes modern providers from traditional institutions with complex pricing structures.

The focus is shifting from pure transactions to holistic life planning. Instead of just recommending individual investments, successful providers accompany their customers as lifelong financial coaches. They systematically address the burning issues of retirement provision and family protection and offer solutions based on life stages.

Digital wealth management: innovation meets customer needs

Robo-advisors have shaken up the market. These fully automated platforms create portfolios based on algorithms and rebalance them regularly. The costs are significantly lower than traditional asset management. They appear attractive for price-sensitive affluent clients.

However, purely digital solutions have their limits. In complex life situations, such as before retirement or in the event of an inheritance, customers want human advice. Emotional aspects of financial decisions cannot be fully algorithmized. The question “Can I afford this dream?” requires more than just a calculation.

The hybrid approach is proving to be the ideal solution. It combines the cost efficiency and scalability of digital processes with the empathy and experience of human advisors.

Mobile-first strategies are gaining in importance. The next generation of affluent customers - millennials and Gen Z with growing wealth - expect seamless smartphone experiences. Apps need to be intuitive, provide real-time information and still offer the highest level of security. Those who fail to invest here will lose touch with future generations of customers.

Reading tip : Financial advice & growth: from solo to successful team

Everon’s approach: tradition and technology in harmony

Everon combines Swiss banking tradition with digital innovation. As a FINMA-regulated asset manager , the company offers the security and reliability that 76 percent of affluent clients value in traditional banks. At the same time, Everon uses state-of-the-art technology to efficiently provide investment solutions for wealthy private clients.

The systematic, science-based approach directly addresses the problem of overconfidence. The Everon Portfolio Engine filters the investment universe according to quantitative criteria and calculates factor scores. This emotionless selection process avoids “behavioral biases” - the psychological traps that even experienced investors often fall into.

Different strategies cover different needs. The Smart Global Markets strategy tracks global financial markets at low cost and thus meets the desire for low fees. It relies on ETFs and index funds, sometimes with a focus on momentum or quality. This is an ideal solution for Affluent clients who value cost efficiency.

The multifactor strategy uses several factors simultaneously: value, momentum, quality and size. The combination of different approaches creates a robust portfolio that works in different market phases.

For investment advisors, co-branding enables a customized version of the Everon app. Their own branding appears alongside Everon’s, giving clients a consistent experience. This helps advisors to target affluent clients without having to build their own technology infrastructure.

How to successfully target affluent clients

• Understand real needs instead of superficial wants. The figures show: Retirement provision and family protection are at the center of attention. Develop solutions that address precisely these phases of life instead of offering generic products.
• Offer transparency for all costs. The importance of low fees for 74 percent of customers is no coincidence. Simple, clear pricing structures with no hidden costs create trust and make the decision easier.
• Create seamless omnichannel experiences. Your customers expect to have access at any time via their preferred medium - whether smartphone app, web platform or face-to-face conversation. The transitions must work smoothly.
• Focus on education instead of paternalism. The overconfidence of many affluent customers requires a diplomatic approach. Offer valuable educational material that conveys competence without being patronizing.
• Think long-term and in partnership. Transactional relationships are not enough. Position yourself as a reliable companion across different phases of life. If you have CHF 300,000 today, you could be an HNWI tomorrow.
• Use data intelligently and ethically. Artificial intelligence can help to anticipate needs and make tailored suggestions. Pay attention to data protection and transparent communication about its use.
• Combine standardization with individualization. Mass customization makes it possible to remain efficient and still respond to personal circumstances. Automate routine processes and save human expertise for complex issues.

The future belongs to those who act today

The growth potential until 2025 is impressive, but the real value lies in the long-term trend. The upper middle class is growing steadily, driven by successful careers and wealth transfers. Tapping into this segment today will secure customer relationships for decades to come.

The generational shift is fundamentally changing expectations. Younger affluent customers are digital natives. They expect app-based services, real-time transparency and sustainable investments. At the same time, they value personal advice when making important decisions. Institutions that combine both worlds will win.

Regulatory framework conditions remain stable. FINMA supervision guarantees high standards and protects customers. This is an advantage for reputable providers - they can differentiate themselves from dubious providers through compliance. Trust remains the currency in wealth management.

Technological trends are accelerating. Artificial intelligence will enable even more precise portfolios. Blockchain technology could open up new asset classes. ESG integration will go from niche topic to standard. Embracing innovation instead of fearing it opens up new opportunities, and the affluent segment is no longer an intermediate market, but an attractive business segment in its own right. The affluent middle class deserves tailor-made solutions that meet their needs. Swiss banks and modern wealth managers such as Everon that recognize this potential and approach it strategically will be the winners of tomorrow. The question is not if, but when you will begin to tap into this market.