Switzerland's financial watchdog has warned of a marked increase in problem cases involving independent portfolio managers, with client assets at risk reaching into the hundreds of millions of Swiss francs and including funds intended for retirement provision.
In guidance published on 3 June 2026, the Swiss Financial Market Supervisory Authority (FINMA) said it continues to encounter recurring issues in client portfolios managed by firms licensed under Article 17 of the Financial Institutions Act. These firms, which came under direct licensing after a transition period ended in 2022, are facing scrutiny over conflicts of interest, weak suitability checks and the use of complex products.
FINMA opened 68 supervisory cases tied to portfolio managers in 2025, up from 34 in 2024 and just nine in 2023. About 1,664 managers and trustees held licenses by the end of 2025. Half of the cases last year were referred by the supervisory organizations that monitor the sector on a day-to-day basis, with the remainder originating from third-party reports.
Conflicts of interest and product risks
The clearest pattern identified by FINMA involved products that portfolio managers themselves issue or structure. The regulator reported finding opaque, layered fee arrangements and remuneration models that incentivised staff to channel clients into the firms' own products. It also highlighted portfolios that were heavily concentrated, in what it described as "clear contradiction to clients' risk profiles".
The products in question included foreign funds without equivalent regulatory oversight, structured products such as actively managed certificates, and securities issued by unregulated entities abroad. According to FINMA, these structures contributed to elevated risks for clients and raised concerns about whether managers were adequately managing conflicts between their own financial interests and those of their customers.
Suitability and governance shortcomings
Alongside conflicts of interest, FINMA pointed to persistent shortcomings in suitability assessments. Some firms were found to have placed clients in high-risk or illiquid instruments without sufficiently verifying whether these investments were appropriate in light of the clients' financial situations, investment objectives and risk tolerance.
The regulator said client assets at risk in the identified cases ranged from tens of millions to several hundred million Swiss francs, noting that part of this capital was "required for retirement provision". The guidance does not impose enforcement measures on named firms, but instead reiterates existing requirements on suitability, governance and the handling of conflicts of interest that portfolio managers are already obliged to follow.
FINMA's communication underscores its expectation that licensed independent portfolio managers align their business models and product offerings with regulatory standards, particularly where clients' long-term savings are exposed to complex or high-risk instruments.
