Switzerland's
financial regulator says the number of problem cases involving independent
portfolio managers doubled last year, with retirement savings among the money
put at risk.
In guidance
published today (Wednesday), the Swiss Financial Market Supervisory Authority,
known as FINMA, said it keeps finding the same issues turning up in client
portfolios, namely conflicts of interest, thin suitability checks and complex
products that many clients were never well suited to hold.
Escalation Cases Doubled
to 68 Last Year
FINMA
opened 68 supervisory cases tied to portfolio managers in 2025, up from 34 a
year earlier and just nine in 2023.
The firms
involved fall under Article 17 of the Financial Institutions Act, the regime
that brought Switzerland's independent
asset managers under direct licensing after a transition period closed at the end of
2022.
Half of
last year's cases came from the supervisory organizations that monitor the
sector day to day, the rest from third-party reports. About 1,664 managers and
trustees held licenses by the end of 2025.
The losses
were not small. FINMA said client assets at risk ran from tens of millions to
several hundred million Swiss francs, with some of the money "required for
retirement provision."
EU Regulators Are Chasing
the Same Conflicts
FINMA is
not the only watchdog worried about whether firms put their own interests ahead
of clients.
In March,
Cyprus's CySEC
CySEC
The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision
The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision
Read this Term told investment firms it would run on-site inspections into
conflicts of interest
as part of a European Securities and Markets Authority sweep, looking at staff
pay, platform design and inducements across the bloc.
ESMA raised
a related point in February, when it reminded firms that perpetual
futures fall under EU rules for contracts for difference.
It called
same-group product issuance a notable conflict that can nudge firms toward
their own products, the same dynamic FINMA describes with in-house funds and
certificates.
The
difference is who FINMA is aiming at. Its guidance does not target retail CFD
brokers but the discretionary managers who build portfolios for wealthier
clients, often using foreign funds, actively managed certificates and in-house
structures that carry lighter supervision.
The concern
underneath, selling complex products to people whose risk profiles do not fit
them, is the one regulators across Europe have spent 2026 pressing.
In-House Products and
Stacked Fees Draw the Closest Look
The
clearest pattern, FINMA said, involved products the managers themselves issue
or structure.
The
regulator found opaque, stacked fees, pay incentives that rewarded staff for
steering clients into the firm's own products, and portfolios concentrated
"in clear contradiction to clients' risk profiles."
The
products in question included foreign funds without equivalent oversight, structured products such as actively
managed certificates,
and securities from unregulated issuers abroad.
Many carry
lighter transparency, valuation and liquidity
Liquidity
The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent
The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent
Read this Term requirements, FINMA said, and
some lack audited accounts entirely.
The
regulator also pointed to suitability failures, with some firms putting clients
into high-risk or illiquid instruments without checking properly whether the
products matched their finances, goals and appetite for risk.
A Young Supervisory Regime
Under Strain
The case
load is testing a system that is still bedding in. Ongoing supervision is
handled by private supervisory organizations, with FINMA stepping in only for serious breaches, and the
regulator said it found weaknesses in how those bodies authorize and oversee
the audit firms they rely on.
Smaller
firms also lean on outside providers for risk management and compliance, FINMA
said, which in several cases produced standardized rather than tailored
controls and left responsibilities unclear.
It follows
an April guidance in which FINMA
reported that 42% of surveyed Swiss financial firms had no policy for digital
fraud.
Supervisory
costs dipped slightly in 2025, though FINMA said its workload in the area stays
heavy.
The guidance carries no enforcement action
against any named firm and instead restates the rules on suitability,
governance and conflicts that managers are already meant to follow.
Switzerland's
financial regulator says the number of problem cases involving independent
portfolio managers doubled last year, with retirement savings among the money
put at risk.
In guidance
published today (Wednesday), the Swiss Financial Market Supervisory Authority,
known as FINMA, said it keeps finding the same issues turning up in client
portfolios, namely conflicts of interest, thin suitability checks and complex
products that many clients were never well suited to hold.
Escalation Cases Doubled
to 68 Last Year
FINMA
opened 68 supervisory cases tied to portfolio managers in 2025, up from 34 a
year earlier and just nine in 2023.
The firms
involved fall under Article 17 of the Financial Institutions Act, the regime
that brought Switzerland's independent
asset managers under direct licensing after a transition period closed at the end of
2022.
Half of
last year's cases came from the supervisory organizations that monitor the
sector day to day, the rest from third-party reports. About 1,664 managers and
trustees held licenses by the end of 2025.
The losses
were not small. FINMA said client assets at risk ran from tens of millions to
several hundred million Swiss francs, with some of the money "required for
retirement provision."
EU Regulators Are Chasing
the Same Conflicts
FINMA is
not the only watchdog worried about whether firms put their own interests ahead
of clients.
In March,
Cyprus's CySEC
CySEC
The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision
The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision
Read this Term told investment firms it would run on-site inspections into
conflicts of interest
as part of a European Securities and Markets Authority sweep, looking at staff
pay, platform design and inducements across the bloc.
ESMA raised
a related point in February, when it reminded firms that perpetual
futures fall under EU rules for contracts for difference.
It called
same-group product issuance a notable conflict that can nudge firms toward
their own products, the same dynamic FINMA describes with in-house funds and
certificates.
The
difference is who FINMA is aiming at. Its guidance does not target retail CFD
brokers but the discretionary managers who build portfolios for wealthier
clients, often using foreign funds, actively managed certificates and in-house
structures that carry lighter supervision.
The concern
underneath, selling complex products to people whose risk profiles do not fit
them, is the one regulators across Europe have spent 2026 pressing.
In-House Products and
Stacked Fees Draw the Closest Look
The
clearest pattern, FINMA said, involved products the managers themselves issue
or structure.
The
regulator found opaque, stacked fees, pay incentives that rewarded staff for
steering clients into the firm's own products, and portfolios concentrated
"in clear contradiction to clients' risk profiles."
The
products in question included foreign funds without equivalent oversight, structured products such as actively
managed certificates,
and securities from unregulated issuers abroad.
Many carry
lighter transparency, valuation and liquidity
Liquidity
The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent
The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent
Read this Term requirements, FINMA said, and
some lack audited accounts entirely.
The
regulator also pointed to suitability failures, with some firms putting clients
into high-risk or illiquid instruments without checking properly whether the
products matched their finances, goals and appetite for risk.
A Young Supervisory Regime
Under Strain
The case
load is testing a system that is still bedding in. Ongoing supervision is
handled by private supervisory organizations, with FINMA stepping in only for serious breaches, and the
regulator said it found weaknesses in how those bodies authorize and oversee
the audit firms they rely on.
Smaller
firms also lean on outside providers for risk management and compliance, FINMA
said, which in several cases produced standardized rather than tailored
controls and left responsibilities unclear.
It follows
an April guidance in which FINMA
reported that 42% of surveyed Swiss financial firms had no policy for digital
fraud.
Supervisory
costs dipped slightly in 2025, though FINMA said its workload in the area stays
heavy.
The guidance carries no enforcement action
against any named firm and instead restates the rules on suitability,
governance and conflicts that managers are already meant to follow.
