FINMA reports a significant increase in portfolio manager cases, with the number doubling last year. The Swiss Financial Market Supervisory Authority (FINMA) revealed that retirement savings are among the funds at risk.
In guidance released today, FINMA noted recurring issues in client portfolios, including conflicts of interest, inadequate suitability checks, and complex products unsuitable for many clients. In 2025, FINMA opened 68 supervisory cases related to portfolio managers, a sharp rise from 34 in 2024 and just nine in 2023.
These firms operate under Article 17 of the Financial Institutions Act, which mandates direct licensing for Switzerland’s independent asset managers following a transition period that ended in 2022. Approximately half of the cases last year originated from supervisory organizations, while the remainder came from third-party reports. By the end of 2025, around 1,664 managers and trustees held licenses.
The financial impact is substantial, with client assets at risk estimated to range from tens of millions to several hundred million Swiss francs, including funds essential for retirement.
FINMA is not alone in its concerns regarding potential conflicts of interest in the financial sector. In March, the Cyprus Securities and Exchange Commission (CySEC) announced plans for on-site inspections to investigate conflicts of interest among investment firms, as part of a broader European initiative.
The European Securities and Markets Authority (ESMA) also highlighted issues related to product issuance within the same group, which can lead firms to favor their own products, a concern echoed by FINMA regarding in-house funds and certificates.
Unlike ESMA’s focus on retail CFD brokers, FINMA’s guidance specifically targets discretionary managers who create portfolios for affluent clients, often utilizing foreign funds and actively managed certificates with less stringent oversight.
The primary issue involves selling complex products to clients whose risk profiles do not align with these investments. FINMA identified a pattern where managers issued or structured the products themselves, leading to opaque fees and incentives that encouraged staff to direct clients toward the firm’s offerings.
These products included foreign funds lacking equivalent oversight, structured products like actively managed certificates, and securities from unregulated foreign issuers. Many of these investments have lighter transparency, valuation, and liquidity requirements, according to FINMA.
Additionally, the regulator pointed out failures in suitability, where clients were placed in high-risk or illiquid instruments without adequate checks on their financial situation, goals, and risk appetite. This growing case load is testing a system still in its early stages, with ongoing supervision conducted by private organizations while FINMA intervenes only in serious cases.
FINMA also noted that smaller firms often rely on external providers for risk management and compliance, which can lead to standardized controls that do not meet specific needs. In an earlier report, FINMA revealed that 42% of surveyed Swiss financial firms lacked a policy for digital fraud.
While supervisory costs slightly decreased in 2025, FINMA emphasized that its workload remains significant. The latest guidance does not impose enforcement actions on any specific firms but reiterates existing rules on suitability, governance, and conflicts that managers are expected to follow.
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