Wealth Management Mandates: Types, Suitability & Rights

A wealth management mandate transfers ongoing investment decisions to a wealth manager, within a strategy that is agreed jointly beforehand. For many investors, this is the way to place the management of their own assets in professional hands without having to answer for every individual transaction themselves.

This article explains the types of mandates available, which rights are delegated to the manager, who is liable in the event of a loss, and who a mandate suits.

What is a wealth management mandate?

A wealth management mandate is a contract in which a client grants a wealth manager the authority to manage the agreed assets independently. The manager makes the investment decisions, buys and sells securities, and aligns the portfolio with the defined strategy, without consulting the client on every individual transaction.

The strategy is based on the client’s goals, investment horizon, and risk capacity. It sets the boundaries within which the manager acts. This is what distinguishes a wealth management mandate from an advisory mandate, where the manager only puts forward proposals and the final decision stays with the client.

The essentials at a glance

• Under a wealth management mandate, the manager decides independently within the agreed strategy; under an advisory mandate, the decision stays with the client.
• Wealth managers in Switzerland have needed a FINMA license under the Financial Institutions Act (FinIA) since 2020 and are subject to a supervisory organization.
• Conduct obligations toward clients are set out in FinSA, clarified further by FINMA Circular 2025/2 (in force since January 1, 2025).
• Conflicts of interest, for instance when in-house products are used, must be disclosed and handled in the client’s interest. FINMA reaffirmed this in Guidance 03/2026 (June 3, 2026).
• The investor generally bears the market risk; the manager is liable for breaches of its duty of care and documentation obligations.

What types of wealth management mandates are there?

Which form is suitable depends on the investment strategy, risk capacity, and the assets available. The following approaches are common in Switzerland and differ mainly in the instruments used and the degree of customization.

Wealth management with index investments

In this approach, assets are invested in indices that broadly track the relevant market. The portfolio is adjusted to the chosen strategy through regular rebalancing. Index investments are cost-efficient and transparent because they follow a defined market rather than selecting individual securities.

Wealth management with investment funds

Here, assets are spread across a broadly diversified portfolio of funds. The weighting follows the strategy and risk capacity. Actively managed funds can complement the portfolio. Investments are typically spread across regions and sectors to cushion market-typical fluctuations more broadly.

Wealth management with individual securities

This variant focuses on individual securities such as equities or certificates and offers the highest degree of customization, because individual companies are selected deliberately. The lower diversification increases single-position risk, which can be limited through deliberate diversification across several securities and sectors.

BVG-oriented wealth management

BVG governs Switzerland’s occupational pension system. A BVG-oriented mandate builds a portfolio following the investment profile typical of Swiss pension funds, combining equities, bonds, and real estate. This approach suits investors who want to orient themselves toward a regulated, pension-focused risk profile.

Discretionary mandate

With a discretionary mandate, an investment strategy is developed together with the client, setting the framework for how the mandate is managed. Within this framework, the manager acts independently. Because setting up and maintaining this form requires more effort, it is usually chosen from a higher investment volume upward.

What rights are delegated with a mandate?

A wealth management mandate places far-reaching authority in the hands of the manager and therefore requires trust. The manager acts within the agreed strategy and is bound by statutory conduct obligations as well as internal policies.

Which decisions does the manager make independently?

Within the agreed framework, the manager buys and sells securities independently, without consulting the client on every transaction. This authority allows the manager to respond promptly to market changes. The framework itself, such as permitted asset classes and the risk profile, remains set for the manager and limits their scope of action.

What obligations apply to the manager?

As a manager of third-party assets, a Swiss wealth manager is subject to FinIA and the conduct obligations under FinSA. These include assessing the suitability of a strategy, maintaining complete documentation, disclosing risks, and adhering to the agreed investment guidelines. FINMA Circular 2025/2 has clarified these obligations since 2025.

Who is liable in the event of a loss?

The risk of value fluctuations arising from general market developments is generally borne by the investor, who is informed of this risk. The manager is not liable for market losses, but is liable for breaches of duty, for instance a lack of care, missing documentation, or disregard of the agreed investment guidelines.

Why does the independence of the manager matter?

An independent wealth manager is not obliged to include in-house bank products in a mandate and works without retrocessions. This removes a significant source of conflicts of interest that can arise when a bank uses its own products in wealth management.

Conflicts of interest cannot always be ruled out entirely, for instance when a manager uses its own strategies. FinSA requires that such conflicts be disclosed and handled in the client’s interest. FINMA has further specified these requirements through Circular 2025/2 and Guidance 03/2026 on product risks in individual portfolio management. For clients, what counts is therefore less a blanket promise than how transparently a manager handles costs and conflicts.

Who is a wealth management mandate suitable for?

A mandate suits people who want to hand ongoing management to professionals rather than monitor markets and act on their own. Whether it fits depends on goals, investment horizon, and risk capacity, not on asset size alone.

Management according to your own guidelines

The basic idea of a mandate is that day-to-day management is handed to professionals, while the strategy follows the client’s own guidelines. Anyone who does not want to dedicate the time or knowledge to ongoing management delegates the implementation, while keeping direction over the agreed strategy.

Why volume matters

A mandate comes with fees, usually as an annual percentage of the assets under management. Because part of the cost is independent of volume, a mandate usually becomes economical only from a certain level of investment assets upward. Many managers work with tiered rates, where the percentage decreases as volume increases.

Frequently asked questions about wealth management mandates

What is the difference between a wealth management mandate and an advisory mandate?

With a wealth management mandate, the manager makes investment decisions independently, within the agreed strategy. With an advisory mandate, the manager puts forward proposals, and the client makes the final decision. The difference lies in who holds decision-making authority, not in the scope of service.

What fees apply to a wealth management mandate?

Fees depend on the investment volume, the chosen strategy, and the management effort involved, so they cannot be stated as a flat rate. A common approach is an annual management fee as a percentage of assets under management, often on a sliding scale that decreases at higher volumes. What matters is full disclosure of all costs.

What does a discretionary mandate mean?

A discretionary mandate is the authority to manage assets independently within a jointly defined strategy, without consulting the client on every individual transaction. The investment scope, permitted instruments, and risk profile are set out in writing beforehand and define the boundaries of the manager’s discretion.

Why does the independence of a wealth manager matter?

An independent wealth manager is not obliged to use in-house bank products and works without retrocessions. Conflicts of interest must be disclosed under FinSA and handled in the client’s interest. FINMA has clarified these requirements through Circular 2025/2 and Guidance 03/2026.

Who is a wealth management mandate suitable for?

A mandate suits people who want to hand ongoing management to professionals rather than act themselves. Because part of the cost is fixed, it usually becomes economical from a certain investment volume upward. Suitability depends on goals, investment horizon, and risk capacity, not on asset size alone.