Since the credit crunch of 2009, Switzerland’s economy had performed moderately, with a 30.1% increase of HNWIs from 2009 to 2013, totalling 360, 917. Titled Switzerland Millionaires: Referendum Trouble, WealthInsight’s analysis of Switzerland’s recent economic performance forecasts a potential further increase of HNWIs of 24.0%, reaching 494,485 in 2018. Alexandra Capik reports.

In addition to the increase of HNWIs in the market, the amount Swiss HNWIs possess is expected to rise by 18% to more than US$2 trillion.

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However, the recent referendum regarding immigration in Switzerland could have an impact on the number of HNWIs holding their money in the country.

With 23% of Switzerland’s population being foreign, matters regarding immigration could easily affect the country’s economy. Moreover, due to the tension between Switzerland and the EU, HNWIs may ultimately choose to hold their money elsewhere. The new immigration laws may not show short-term effects, but could potentially pose challenges for the Swiss economy in regards to a less skilled work force.

Currently, Swiss HNWIs hold 59.2% of their assets in Switzerland (US$907.5 billion). WealthInsight’s report expects this number to reduce to 58.9% by 2018. However, the immigration issues arising in Switzerland may actually result in an increase in this figure due to the possible reduction of foreign allocation, resulting from a withdrawal in trade relations with European countries.

Swiss government and business leaders in Switzerland are concerned about the effects of the recent referendum.

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"The situation with immigration and the increased pressure the country is coming under from the US over the Foreign Account Tax Compliance Act are showing a country that wants to shut itself off from the world," said Tom Carlisle, analyst at WealthInsight.

HNWIs could end up moving their asset management elsewhere to other major financial hubs such as Singapore or the UK. Depending on the extent to which the new immigration laws are implemented, Switzerland could face a reduction in HNWI growth.

"It is imperative that Switzerland assesses the degree in which they will implement these changes to keep peace at home, whilst still looking to entice qualified professionals from around the world, especially HNWIs," said Carlise.

WealthInsight’s data shows that HNWIs hold 45.9% of their wealth in Switzerland’s financial services sector, indicating that Switzerland has one of the biggest financial services sectors in the world. No other sector surpasses 8.1%. Due to a large number of foreign employees making up the Swiss financial services, foreign influx is necessary for the wellbeing of the Swiss economy.