Switzerland's financial regulator has warned of a sharp increase in problem cases involving independent portfolio managers, citing recurring conflicts of interest, inadequate suitability checks and the use of complex products that many clients were not well suited to hold.
In guidance published on Wednesday, the Swiss Financial Market Supervisory Authority, known as FINMA, said it opened 68 supervisory cases tied to portfolio managers in 2025. That figure was double the 34 cases recorded a year earlier and far above the nine cases it handled 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. By the end of 2025, about 1,664 managers and trustees held licenses under this framework.
Conflicts of interest and complex products
FINMA said it keeps finding the same issues turning up in client portfolios. The clearest pattern involved products that the portfolio managers themselves issue or structure. The regulator identified opaque, stacked fee structures and pay incentives that rewarded staff for steering clients into the firm's own products.
It also highlighted portfolios concentrated in clear contradiction to clients' stated risk profiles. Products cited in the guidance included foreign funds without equivalent oversight, structured products such as actively managed certificates, and securities from unregulated issuers abroad.
Client assets and suitability concerns
According to FINMA, the financial impact of the problem cases was significant. Client assets at risk ranged from tens of millions to several hundred million Swiss francs, with some of the money required for retirement provision. The regulator underlined that retirement savings were among the assets potentially jeopardised.
FINMA also pointed to suitability failures, stating that some firms had placed clients into high-risk or illiquid instruments without properly checking whether these products matched their financial situation, investment goals and appetite for risk. The guidance noted that such shortcomings ran counter to the rules on suitability that managers are required to follow.
Supervisory sources and regulatory response
Half of the supervisory cases opened in 2025 originated from the supervisory organizations that monitor the sector on a day-to-day basis, while the other half stemmed from third-party reports. The guidance itself does not include enforcement action against any named firm.
Instead, FINMA used the publication to restate existing requirements on suitability, governance and the management of conflicts of interest for independent portfolio managers operating under the Financial Institutions Act. The regulator's findings indicate that despite the completion of the transition to direct licensing, supervisory concerns around product complexity, incentives and client protection remain prominent.
