Financial Planning: Which Documents for Your First Meeting?
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Financial Advice
Financial advice describes the support provided on financial decisions, ranging from pension provision and investment to financial planning. In Switzerland, the term is not legally protected and covers a wide range of services. One regulated form is investment advice under FinSA, which can be provided by a wealth manager as well as by an independent financial adviser. What matters, therefore, is not the label but the specific service and its regulatory basis.
The essentials
- The term 'financial advice' is not protected by law in Switzerland; what matters is the specific service actually provided and its regulatory basis, not the professional title.
- Investment advice is a service regulated under FinSA; it can be provided by a wealth manager as well as by an independent financial adviser.
- As a rule, client advisers must be entered in the register of advisers before they start working in Switzerland if they work for a foreign financial service provider or for a Swiss financial service provider that is not supervised under Art. 3 FINMASA (Art. 28 para. 1 FinSA).
- To be entered, client advisers must prove that they know the code of conduct under FinSA and have the necessary expertise. They also need professional indemnity insurance or equivalent collateral and, where a duty to affiliate exists for them or their financial service provider, affiliation to an ombudsman (Art. 29 para. 1 FinSA). Client advisers register with a registration body that holds a licence from FINMA (Art. 31 para. 1 FinSA).
- Institutions supervised under Art. 3 FINMASA include Swiss banks and wealth managers with an authorisation from FINMA. The client advisers of these institutions do not need to be entered in the register. Client advisers of foreign financial service providers are exempt from the duty to register if the financial service provider is subject to prudential supervision abroad and the client advisers serve exclusively professional or institutional clients in Switzerland (Art. 28 para. 2 FinSA, Art. 31 FinSO).
Sources: FinSA Art. 28, Duty to register (fedlex) · FinSA Art. 29, Registration conditions (fedlex) · FinSA Art. 31, Registration body (fedlex) · FinSO Art. 31, Exemption from the duty to register (fedlex) · FINMASA Art. 3, Supervised persons and entities (fedlex) · FinIA Art. 6, Authorisation chain (fedlex)
Frequently asked questions about Financial Advice
Financial advice is an umbrella term; one regulated form of it is investment advice. With wealth management, you hand ongoing investment decisions to a provider; with investment advice, you receive recommendations and decide yourself. Investment advice may be provided by a wealth manager as well as by an independent financial adviser. Such advice is subject to the rules of conduct under FinSA but does not itself require FINMA authorisation. By contrast, anyone who manages third-party assets on a commercial basis in Switzerland requires FINMA authorisation, usually as a wealth manager. Banks need no additional authorisation for this, because authorisation as a bank also covers the activity of a wealth manager (Art. 6 para. 1 FinIA). What matters is which service you want and how the provider is regulated.
The register of advisers is the FinSA register in which certain client advisers must be entered before they start working in Switzerland. This applies to client advisers who work for a Swiss financial service provider that is not supervised under Art. 3 FINMASA and, as a rule, also to client advisers of foreign financial service providers (Art. 28 para. 1 FinSA). Client advisers of Swiss banks and of wealth managers with an authorisation from FINMA do not need an entry, because these institutions are supervised under Art. 3 FINMASA. With an entry, a client adviser has proved that they meet the statutory requirements, including expertise and professional indemnity insurance or equivalent collateral. The entry is not an authorisation from FINMA and says nothing about the quality of a service.
It depends on the activity. Financial advice is not a protected term; individual activities are regulated. Investment advice and portfolio management are financial services under FinSA. Wealth managers also need an authorisation from FINMA under FinIA. A client adviser who works for a foreign financial service provider or for a Swiss financial service provider that is not supervised under Art. 3 FINMASA must, as a rule, be entered in the register of advisers.
This depends on the model and services provided: fee-based (hourly or fixed fee), as a percentage of assets under management, or through product commissions. Transparent providers disclose their remuneration clearly. The contractual and tax arrangements may vary.
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This overview is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.
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