CEO of $5.6 billion Swiss bank says country is still the ‘No. 1 location’ for wealth after voters reject a tax on the ultrarich

Swiss voters rejected by 78% a proposal to impose a national tax on inheritances or gifts above CHF 50 million (~$62m), a levy aimed at roughly 2,500 people to fund climate measures and inequality relief. The result reinforces Switzerland’s appeal as a private-banking hub—EFG CEO Giorgio Pradelli said it will remain the No.1 wealth-management location—while the Henley report forecasts record millionaire relocation (≈142,000 in 2025 rising to 162,000 in 2026), with the UAE, US and Italy leading and Switzerland ranking fourth. Implication for investors: the repeal preserves a favorable environment for Swiss private banks and cross-border wealth inflows, though competition from zero‑tax jurisdictions poses an ongoing strategic risk.

Analysis

Market structure: The referendum loss preserves Switzerland’s competitive edge for private banking—direct winners are listed Swiss wealth managers and Swiss-domiciled luxury/real-estate assets (UBS, BAER.SW, CFRHF, Swiss high-end property). With ~142k millionaires migrating in 2025–26 and the top 300 holding ~CHF1tn, marginal inflows of 1–3% AUM to Swiss institutions could lift fees/margins selectively over 6–12 months while compressing yields on Swiss sovereign bonds by ~10–50bps as CHF demand rises.

Risk assessment: Tail risks include a renewed national wealth tax (political swing), SNB FX intervention or capital control talk, and accelerated competition from Gulf residency programs; any of these could cause >20% re-rating in small-cap wealth managers in 3–12 months. Immediate (days) risks: short-term CHF volatility on headlines; short-term (weeks/months): repositioning by UHNW clients; long-term (quarters/years): structural migration trends and property inflation.

Trade implications: Direct plays are long Swiss wealth managers and Richemont, paired with long-CHF exposure and short-duration Swiss sovereigns; expect 6–12 month alpha of 10–25% on correctly sized names. Use options to express CHF view (6-month USD/CHF puts ~1–3% OTM) and buy protective 3–6 month puts on bank names to cap tails; rotate 1–3% real-money allocation from EU universal banks into Swiss private-banking longs.

Contrarian angles: Consensus overlooks market-share caps from the UAE and the fact much benefit is already priced into Swiss names; premium valuations imply flow disappointment risk of 10–30% if migration stalls. Unintended consequences include domestic property regulation or fee compression; therefore size positions conservatively and set hard triggers tied to parliamentary/tax events within 90–180 days.

Key Decisions for Investors

• Establish a 2.0% portfolio long in UBS (UBS) and a 1.5% long in Julius Baer (BAER.SW) targeting 6–12 month upside from AUM inflows; hedge downside by buying 3–6 month ATM puts sized to 25% of the equity notional.
• Allocate 1.0% portfolio to long-CHF exposure via a 6-month USD/CHF put (≈2% OTM) or an equivalent spot short USD/CHF position; target CHF appreciation of 1–3% in 3–6 months and set a stop-loss if USD/CHF moves +3% adverse.
• Initiate a 1.5% long position in Richemont (CFRHF) paired with a 1.5% short in BNP Paribas (BNP.PA) to capture expected Swiss luxury/wealth-manager outperformance; target 300–600bps relative outperformance over 12 months, exit if relative underperformance exceeds 10% in 3 months.
• If Swiss federal legislature schedules a new wealth-tax vote or committee advances a bill with >10% projected effective tax rate within 90 days, reduce Swiss bank/real-estate exposure by 50% within 10 trading days and redeploy into non-Swiss luxury/wealth franchises (LVMH/LVMUY, global alternatives).