Wealth Advisor:
The Figure between the Client, the Bank and the Asset Manager

In the management of complex wealth, particularly where the Client maintains multiple banking relationships, exposure to several asset classes, different jurisdictions or a number of professional counterparties, it is essential to establish a decision-making process that is structured, coherent and capable of being monitored over time.

In this context, the role of the wealth advisor becomes particularly important, although it is often misunderstood. The advisor is not necessarily the party directly managing the portfolio, nor does the advisor replace the custodian bank or the asset manager. Its value lies in supporting the Client in understanding wealth-related decisions, assessing proposed solutions, coordinating the various counterparties involved and maintaining an overall strategy aligned with the Client’s family, financial and succession objectives.

This distinction is important. The Client remains the central party: defines the objectives, bears the economic risk and makes the final decisions, unless portfolio management has been formally delegated to an authorised manager. The Bank safeguards the assets, manages the banking relationship, and performs compliance, execution, reporting and operational control functions. The asset manager, where appointed, manages the portfolio in accordance with a mandate, strategy or investment policy. The wealth advisor is positioned within this framework, alongside the Client, with a function focused on analysis, interpretation, supervision and coordination.

This role becomes particularly relevant when the Client does not simply wish to receive investment proposals, but wants to understand whether those proposals are consistent with the overall wealth structure, the desired risk profile, family circumstances, time horizon and long-term objectives.

A Necessary Distinction

In common language, terms such as advisor, private banker, asset manager, portfolio manager, financial consultant and relationship manager are often used interchangeably. In reality, they refer to different roles.

The private banker is usually the Client’s main point of contact within the Bank. He manages the relationship, coordinates banking services, presents investment or wealth-related solutions and acts as an interface between the Client and the banking institution. His activity is carried out within the Bank’s own framework, including its products, processes and internal policies.

The asset manager, or portfolio manager, where appointed under a discretionary mandate, may take investment decisions on behalf of the Client within the limits of the mandate received. He may decide how to allocate the portfolio, which instruments to buy or sell, when to rebalance and how to implement the agreed strategy. In this case, the Client delegates a significant part of the operational management.

The wealth advisor assists the Client in defining the strategy, assessing proposals, selecting intermediaries, comparing solutions and supervising the asset allocation, although he does not necessarily have operational powers over the assets. His role is rather to help the Client maintain a clearer, more informed and more structured view of the overall wealth position. In other words, the advisor is not necessarily the party who executes. He is the professional who helps the Client understand, assess and coordinate.

His objective is to help the Client transform broad needs into concrete wealth objectives. Many Clients express their needs through apparently simple statements: protecting wealth, generating returns, diversifying, reducing risk, preparing for generational transfer, preserving liquidity, investing more efficiently, and so on. However, each of these expressions must be translated into practical parameters.

“Protecting wealth” may mean many different things: reducing portfolio volatility, avoiding excessive concentration, limiting currency risk, protecting family assets from succession-related fragmentation, maintaining sufficient liquidity or avoiding exposures that are not fully understood. “Generating returns” may mean producing recurring income, growing capital over the long term, offsetting inflation or supporting specific family needs. “Diversifying” does not simply mean holding a large number of financial instruments, but building coherent exposure across markets, currencies, sectors, instruments, liquidity and overall risk.

The advisor helps the Client move from an intuitive formulation of needs to the definition of a clear and understandable wealth strategy. Only once those needs have been clarified does it make sense to discuss portfolios, managers, banks or financial instruments.

It should also be considered that, in complex wealth structures, investment management is only one part of the issue. Wealth may include real estate, corporate shareholdings, holding companies, trusts, foundations, insurance policies, private equity, liquidity, art, international tax matters, succession planning and family interests spread across several generations.

In these cases, the wealth advisor may take on a governance function. He does not necessarily decide and does not necessarily manage, but he helps maintain order among multiple counterparties and different levels of decision-making. He may interact with tax advisors, lawyers, notaries, fiduciaries, trustees, asset managers, private bankers and specialised consultants, helping to avoid a situation in which each professional works in isolation. A tax-efficient solution may not be consistent with family governance. An attractive financial proposal may be unsuitable for the Client’s liquidity profile. A succession structure may fail to take into account the management of the underlying assets. A portfolio may be efficient in isolation, but not within the Client’s broader wealth context.

The advisor’s role is to help the Client see these connections.

In an HNWI family, for example, the advisor can help distinguish between personal capital, family capital, entrepreneurial capital and capital intended for future generations. He may contribute to defining which assets should generate income, which should be protected, which may be exposed to higher risk and which should remain liquid. He may also assist in building a more orderly decision-making process among the wealth founder, the heirs, the managers and the other professionals involved.

The Relationship with the Asset Manager and the Custodian Bank

The advisor is a figure of assistance, coordination and supervision.

The relationship between the advisor and the asset manager is one of the most delicate aspects. The asset manager may have an operational role in managing investments; the advisor, on the other hand, may assist the Client in assessing that management.

In an orderly structure, the advisor does not overlap with the asset manager. He supports the Client’s side of the relationship. He may help select the manager, compare different proposals, understand the management mandate, assess the investment policy, read the reporting, analyse costs and performance, verify the consistency between the portfolio and the Client’s objectives, and identify any deviations from the agreed strategy.

This is particularly important because performance alone is not sufficient to assess the quality of a management activity. A portfolio may have generated a strong return while taking excessive risks, creating unwanted concentrations, assuming currency exposures that are not aligned with the Client’s profile or investing in instruments with limited liquidity. Conversely, a portfolio may underperform over a given period while remaining consistent with a prudent mandate or a capital preservation strategy.

A portfolio may also become inconsistent for many reasons. Markets change, certain asset classes grow more than others, liquidity decreases, currency risk increases, a single manager may create excessive concentration, the family situation may evolve or the Client may change residence. Even a strategy that was appropriate at the outset may become less suitable over time. The advisor helps prevent the strategy from being left on autopilot. This is particularly useful when the Client does not wish to go into the technical details of every investment, but still wants to maintain control and awareness. In this case, the advisor can act as an intermediate level of interpretation: translating technical complexity into understandable decision-making elements.

Where several asset managers are involved, the advisor’s role may become even more relevant. Each manager tends to present his own portfolio independently, but the Client needs a consolidated view. Two different managers may hold similar instruments, generating exposures that are not immediately visible. Several portfolios that appear diversified may in fact expose the Client to the same risk factors. The advisor can help build an aggregated view of the wealth structure, avoiding a situation in which diversification is only formal.

In this sense, the advisor does not assess the asset manager on the basis of impressions, but according to objective criteria: mandate, risk, costs, risk-adjusted performance, consistency of the asset allocation, transparency of reporting, liquidity, quality of the investment process and communication standards.

As regards the Bank, it performs an essential function in wealth management. It safeguards the assets, opens and maintains the banking relationship, carries out compliance and anti-money laundering checks, executes orders and produces reporting.

The relationship between the wealth advisor and the Bank must be clearly defined. The advisor does not necessarily communicate with the Bank directly or operationally. Without a power of attorney, a specific authorisation or a formalised mandate, he cannot replace the Client or issue instructions. In many cases, the operational relationship with the Bank is managed by the Client directly or by the asset manager, where the latter has a management mandate. Any participation by the advisor in meetings, calls or information exchanges must be transparent and based on a mandate granted by the Client.

This does not mean that the advisor has no role in relation to the banking relationship. In some cases, the advisor may even have introduced the Client to the Bank and may hold a power of attorney to receive information from the banking institution. His function in the banking relationship is to assist the Client in understanding the conditions applied, assessing costs, reviewing the reporting, comparing banks, preparing meetings and verifying the quality of service, always within the limits authorised by the Client and accepted by the Bank.

For the Client, these distinctions are important. It must be clear who safeguards the assets, who manages the portfolio, who provides advice, who may issue instructions and who is responsible for the decisions. An effective wealth structure is not one in which roles overlap, but one in which responsibilities are clearly defined and documented.

The Conditions for an effective collaboration

To establish an effective collaboration, the Client should begin with a clear definition of the mandate.

The advisor can generate value, but only if his role is properly defined. Otherwise, confusion may arise.

The first point is the scope of the engagement. Does the advisor deal only with the financial portfolio or with the Client’s overall wealth? Does he assess individual investments or coordinate multiple counterparties? Is he involved in the selection of banks and asset managers? Does he also support succession, corporate or family-related matters? The clearer the scope, the lower the risk of misunderstandings. Particular attention should be paid to avoiding overlap with the asset manager. If the advisor, despite not holding a management mandate, effectively starts to direct the portfolio operationally, the line between advice and management may become ambiguous. This can create risks for the Client, the advisor and the intermediaries involved.

The second point is the flow of information. The advisor must have access to sufficient information to perform his role properly. Without reports, statements, mandates, costs, asset allocation and objectives, the advice risks remaining superficial. Naturally, access to such information must take place in accordance with the Client’s authorisations and the procedures of the intermediaries involved. In complex wealth structures, informal memory is not sufficient. It is important to be able to reconstruct why a decision was made, on the basis of which information, with which alternatives and subject to which limits.

The third point is the process. It is useful to establish a review frequency: quarterly, semi-annually or annually, depending on the complexity of the wealth structure. During these reviews, the advisor can help the Client assess performance, risks, costs, liquidity, deviations from the strategy and any need for updates. The objective is to avoid fragmentation among counterparties. If the Client has several banks, several managers and several consultants, but no consolidated view, the wealth may appear diversified without truly being so. The advisor should help reduce this fragmentation.

A periodic review of the mandate itself should also be established. The advisor’s role must evolve with the wealth structure. A Client who initially needs only support in reading the portfolio may, over time, require family coordination, manager selection, wealth structuring or succession governance.

The fourth point is decision-making responsibility. The Client must know which decisions remain with him, which decisions are delegated to the asset manager, which are executed by the Bank and what role the advisor performs. This distinction is essential to avoid confusion during difficult market conditions.

Finally, it is important not to confuse advisory with a guarantee of results. The advisor can improve the decision-making process, but he does not eliminate market risk, credit risk, liquidity risk or tax risk. His value does not lie in promising results, but in making decisions more transparent, coherent, documented and controlled.

Final Considerations

The wealth advisor plays an increasingly relevant function in complex wealth structures because he helps the Client navigate among parties, instruments and decisions that often belong to different levels.

His role consists in supporting the Client in defining objectives, understanding solutions, assessing counterparties, supervising the strategy and coordinating the wealth structure over time.

For the Client, this means being able to make more informed decisions. For the asset manager, it means operating within a clearer strategic framework. For the Bank, it means interacting with a more orderly wealth structure. For the family, it means having continuity in the management of wealth.

In a context in which wealth complexity is increasing, the value of the advisor increases more than proportionally.

When properly framed, the advisor is one of the most effective tools for reducing uncertainty and complexity in wealth management.

Sources:

• Swiss FInancial Services Act - FinSA/LSerfi - 2020

• FInma - circular on Rules of Conduct under FInSA - 2025

• Finma - Portfolio Manager & Trustees - 2020

• Finma - Client Adviser Registration - 2020

• Swiss Bankers Association - Portfolio Management Guidelines - 2020

• Swiss Bankers Association - Custody Banking - 2020

• CFA Institute - Asset Manager Code of Professional COnduct - 2018

• G20/OECD - High level Principles on Financial COnsumer Protection - 2022