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 adult Swiss population and holds, according to Deloitte, 40 percent of all onshore financial 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 The answer lies in outdated business models and a lack of targeted strategies for the affluent segment.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 of Switzerland
• Market potential: a quarter of the adult Swiss population holds nearly 40 percent of onshore financial assets. For the corresponding investment volume, Deloitte forecast a rise to around CHF 750 billion by 2025 (Source: Deloitte, “Swiss Affluent Clients,” 2023)
• Main needs: Low fees (74 percent) and retirement provision (59 percent) (Source: Deloitte, 2023)
• The paradox: 71% are convinced they can correctly assess their own risk tolerance, yet only 28% have set clear return targets and only 16% truly understand more complex instruments (Source: Deloitte, 2023)
• 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?

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. As a rough benchmark, some institutions set the threshold for so-called mass affluents as low as CHF 100,000 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. For the corresponding investment volume, the Deloitte study “Swiss Affluent Clients” (2023) forecast growth to around CHF 750 billion by 2025. An updated survey showing the actual current figure is not yet available.

For the period from 2018 to 2025, Deloitte forecast an annual growth rate of 1.9 percent in the lower wealth segment and 3.9 percent in the upper segment (Source: Deloitte, 2023). This market growth continues to offer significant business opportunities for financial service providers willing to develop tailored solutions for the segment.

Particularly noteworthy: according to Deloitte, 31 percent of affluent clients do not have a pillar 3a account. In a segment that accounts for around a quarter of the adult Swiss population, that adds up to a six-figure number of affluent clients who miss out on tax savings year after year. For advisors, this represents a concrete opportunity that many institutions have yet to actively pursue.

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The affluent middle class: needs between aspiration and reality

What issues really concern affluent customers? According to the Deloitte study “Swiss Affluent Clients” (2023), planning for retirement clearly tops the list with 59%, followed by family maintenance at 45 percent. According to the study, these priorities remained remarkably stable even through crises such as the war in Ukraine and rising inflation.

When choosing a bank, one thing counts above all: low fees. For 74 percent of respondents, this is the decisive factor according to Deloitte. 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, according to the study. 76% of affluent 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, according to the same study, 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.

Self-assessment and reality: the knowledge gap in the affluent segment

The affluent segment is characterized by a remarkable paradox: according to the same Deloitte study, 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 or ETFs, which provide diversification across many holdings through a single position. This resembles the so-called Dunning-Kruger effect, in which superficial knowledge leads people to overestimate their own competence.

Particularly serious: 31 percent do not have a pillar 3a account. This means they are foregoing the deduction from taxable income that pillar 3a allows up to the annual maximum amount. This clearly shows how overconfidence combined with knowledge gaps can lead to measurable opportunity costs.

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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 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 and 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 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. Serving affluent clients combines standardized, cost-efficient processes with the opportunity for personal discussions on important decisions. The wealth strategy for assets of CHF 200,000 or more uses digital automation for routine tasks and saves human expertise for complex issues.

This hybrid approach can meaningfully reduce costs: where less personal advisory time is required and more processes run automatically, fees are typically lower than for a traditional, fully personalized private banking mandate. At the same time, clients gain access to professional investment strategies and rules-based portfolio construction.

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 propose matching 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 remains a means, not an end in itself.

Transparent fee models create trust. Costs that are simply structured and easy to understand are also 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: opportunities and limits of automation

Robo-advisors have shaken up the market. These fully automated services create portfolios based on algorithms and rebalance them regularly. The costs are significantly lower than those of 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 reduced to an algorithm. The question “Can I afford this dream?” requires more than just a calculation.

The hybrid approach 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 a high level of security. Those who fail to invest here will lose touch with future generations of customers.

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Everon’s approach: combining tradition and technology

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

The systematic, rules-based approach is aimed precisely at this problem of overconfidence. The Everon Portfolio Engine filters the investment universe according to quantitative criteria and calculates factor scores. This rules-based selection process is designed to limit the influence of “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. Passively tracking instruments carry lower ongoing product costs than actively managed funds.

The multifactor strategy uses several factors simultaneously: value, momentum, quality and size. Combining these approaches spreads the strategy across multiple sources of return.

Within the partnership with Everon, wealth advisors benefit from co-branding: the Everon app can be customized, and their own branding appears alongside Everon’s, giving clients a consistent experience. This collaboration helps advisors to target affluent clients without having to build the corresponding processes on their own.

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, online banking 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. A client with CHF 300,000 today 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.

Outlook: growth, generational shift and technology

The long-term trend in the affluent segment remains intact: the upper middle class is growing steadily, driven by successful careers and wealth transfers. Tapping into this segment today builds client relationships that can span several stages of life.

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.

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 are already tapping into this potential strategically today. Institutions that invest in a structured affluent strategy now give themselves a head start over later entrants.