What Is The Difference Between an Independent Wealth Manager and a Bank?
Interview with Mirjam Baumgartner,
Portfolio Manager
Who Is Mirjam Baumgartner?
I am a portfolio manager at Zeltner & Co. In this role, I am jointly responsible for our clients’ investment strategies and portfolio analysis. Prior to joining Zeltner & Co, I worked in corporate finance and real estate. I hold a master’s degree in business and economics from the University of Zurich.
What Is Wealth Management and How Does It Work in Switzerland?
Wealth management in Switzerland involves a professional wealth manager overseeing and managing an investment portfolio on behalf of clients. Investment decisions are taken by the wealth manager in accordance with the agreed investment strategy, the client’s risk profile, and their individual objectives.
Portfolios are continuously monitored and adjusted where necessary to respond to changing market conditions, while remaining aligned with the agreed strategic framework.
Is Wealth Management the Same as Investment Advisory?
No. Wealth management and investment advisory differ in one key respect. Under an investment advisory relationship, the client receives investment recommendations but retains responsibility for making the final investment decisions. Under a discretionary wealth management mandate, investment decisions are made by the wealth manager within the agreed mandate parameters.
At the outset, the client and wealth manager jointly define the investment strategy. Thereafter, implementation and ongoing portfolio management is delegated to the wealth manager. As an investment boutique, Zeltner & Co specialises in discretionary wealth management.
The frequency of client interaction and the level of involvement in investment decisions are entirely tailored to individual preferences. We remain available for discussions at any time. In addition, clients receive a detailed quarterly report covering portfolio performance and our current market outlook.
What Is The Difference Between Wealth Management and Private Banking?
Private banking refers to the comprehensive range of services offered by a bank to high-net-worth individuals. This typically includes investment advisory, wealth management, custody services, banking facilities, retirement planning and lending solutions.
Wealth management, by contrast, is more specialised and focuses primarily on the professional and active management of investment portfolios. At Zeltner & Co, we complement this focused investment approach with highly personalised client service.
How Does the Client Experience at Zeltner & Co Differ from That of a Bank?
Zeltner & Co is a FINMA-licensed independent wealth manager. A key differentiator is our ability to provide a highly personalised, flexible and client-centric service. Our clients interact directly with the decision-makers and investment professionals who actively manage their portfolios, rather than solely through a relationship manager.
Our approach is rooted in family values, built for the long term, and guided by transparency, integrity and entrepreneurial thinking. We invest according to the same principles applied by the Zeltner family and our team when managing our own wealth.
How Does Zeltner & Co’s Investment Approach Differ from Traditional Portfolio Management?
One of the key differentiators of our investment approach is our view on traditional fixed income. In our opinion, conventional bonds currently offer an unattractive risk-return profile. In today’s market environment, we deliberately move beyond the traditional portfolio construction model, which is largely centred on equities and bonds. Instead, we place greater emphasis on alternative investments that provide genuine diversification and enhance portfolio resilience. Their low correlation to equity markets makes them particularly valuable, as their performance is driven by factors largely independent of traditional financial markets. Examples include music royalty funds, which generate income from music rights, and catastrophe bonds (cat bonds), whose returns are linked to insurance risks rather than stock market performance.
A second distinguishing feature is our allocation to real assets, particularly industrial metals. We invest through direct ownership of physical metals that are securely stored in a Swiss bonded warehouse. Current examples include copper, nickel and hafnium. These investments enable our clients to benefit from long-term structural trends such as the energy transition, infrastructure development and the growing energy demand associated with artificial intelligence. Compared with a portfolio focused solely on gold and silver, this approach offers significantly broader diversification.
To give investors access to opportunities such as alternatives to traditional fixed income and industrial metals, Zeltner & Co has developed not only the necessary expertise but also efficient investment access. This is a key advantage that enables us to construct portfolios in a consistent and differentiated manner.
Finally, we take a consciously global perspective. Many Swiss portfolios allocate more than 50% of their assets to Europe. We deliberately avoid this so-called home bias and instead seek broader diversification across international markets, ensuring that our clients benefit from opportunities wherever they arise.
What Are Royalty Funds?
Royalty funds provide investors with exposure to royalty rights. Income is generated through licensing and royalty revenues whenever the underlying assets are used or consumed. For example, music royalty funds generate income through streaming platforms, radio broadcasts, films or advertising. This investment opportunity arises because artists and rights holders may sell interests in their music catalogues to monetise future income streams today.
Investors benefit from attractive ongoing distributions, while returns exhibit virtually no correlation with equity markets. Revenue generation depends on consumer listening behaviour rather than stock market performance.
As access barriers are often high, direct investment is difficult for many investors. As an investment boutique, Zeltner & Co provides clients with access to this otherwise hard-to-reach asset class.
What Are Cat Bonds?
Cat bonds, or catastrophe bonds, are securities issued by insurance and reinsurance companies. They transfer a portion of catastrophe-related risks from insurers to capital market investors. In exchange, investors receive attractive coupon payments. Losses may occur only if a predefined catastrophe event takes place, such as an earthquake or hurricane of specified magnitude within a defined geographical area.
One of the most attractive characteristics of cat bonds is their negligible correlation with traditional financial markets. Returns depend on the occurrence of insured catastrophe events rather than economic or equity market developments. Given their unique risk profile, we use cat bonds as a complementary portfolio allocation within a diversified investment strategy.
How Does Zeltner & Co Manage Market Volatility and Crises?
Our investment approach is founded on a long-term perspective. Market volatility is an inherent part of investing, and short-term market movements do not drive our decision-making. At the same time, we actively monitor client portfolios and make adjustments where appropriate. Thanks to our boutique structure and short decision-making processes, we are able to respond quickly, efficiently and in the appropriate measure when market conditions require it.
Our approach combines strategic asset allocation (SAA) and tactical asset allocation (TAA). Strategic asset allocation defines the long-term portfolio structure across different asset classes and provides the foundation of the investment strategy. Tactical asset allocation allows us to make selective adjustments within this framework in response to evolving market conditions and emerging opportunities.
Particularly during periods of uncertainty, investors benefit from a well-diversified portfolio spanning multiple asset classes. Broad diversification reduces dependence on individual markets and helps mitigate losses in one area through stability and performance in others. Our investment philosophy deliberately differs from the standardised solutions offered by many banks. By combining broad diversification with the flexibility to identify and capitalise on relevant market trends at an early stage, we aim to create resilient portfolios that are well positioned across different market environments.
Can I Keep My Existing Custodian Bank?
We are happy to evaluate custody arrangements on a case-by-case basis. Importantly, client assets always remain with the custodian bank. There is no transfer of assets to Zeltner & Co. We manage client portfolios exclusively under a limited power of attorney granted by the client.
Can I Transfer My Existing Portfolio to Zeltner & Co?
Many new clients already hold individual securities, investment funds or entire portfolios. We review each situation individually and assess how existing holdings can be transferred and integrated into a new discretionary mandate as efficiently and cost-effectively as possible.
Who Can Benefit from Independent Wealth Management in Switzerland?
Suitability depends on an individual’s circumstances, objectives and level of investable assets. In general, independent wealth management is particularly appropriate for investors who wish to delegate investment decisions to experienced professionals and avoid managing their portfolios on an ongoing basis.
Whether such a solution is appropriate for your situation is best determined through a personal discussion. We would be pleased to assess the most suitable options together with you.
How Do I Choose the Right Wealth Management Mandate?
Every client engagement begins with a thorough assessment of investment objectives and risk profile. Based on this analysis, we recommend one of our four discretionary strategies:
Core – Our house strategy, reflecting our core investment convictions and delivering a balanced risk-return profile.
Dynamic – A growth-oriented strategy with a higher equity allocation, suitable for investors willing to accept greater volatility in pursuit of higher long-term returns.
Defensive – A conservative strategy focused on capital preservation, designed for investors who prioritise stability and security.
Cashflow-Driven – A strategy focused on generating regular and stable income while preserving capital. The target distribution yield is approximately 5% per annum.
What Is The Core Mandate?
The Core Mandate represents Zeltner & Co’s house investment strategy and reflects our core investment convictions. The portfolio is globally diversified across multiple asset classes, combining equities, fixed income and the alternative investments that form an integral part of our investment philosophy. Its strategic asset allocation (SAA) consists of 50% equities, 10% fixed income and 40% alternative investments. The objective is to achieve an attractive balance between long-term return potential and risk management. The Core Mandate is designed for investors seeking a well-diversified portfolio with a balanced risk-return profile and a long-term investment horizon.
What Is the Cashflow-Driven Mandate?
The Cashflow-Driven Mandate is an income-focused investment strategy designed to generate regular and reliable distributions. The target annual yield is approximately 5%, achieved through a diversified portfolio constructed to deliver stable cash flows over the long term. The strategic asset allocation (SAA) consists of 40% equities, 20% fixed income and 40% alternative investments, reflecting our conviction that a broad range of income-generating assets can provide both resilience and attractive returns. Wherever possible, the strategy also seeks to optimise after-tax returns through tax-efficient portfolio construction. The mandate is particularly suitable for investors with ongoing income requirements and a more conservative risk profile. In practice, it is frequently used for pension capital that has been withdrawn and requires a sustainable source of income while preserving long-term capital.
Should I Take My Swiss Pension as a Lump Sum or as an Annuity?
When pension assets are withdrawn as capital, they become part of the investor’s personal wealth. The assets can then be invested and utilised at the investor’s discretion and remain transferable to heirs upon death. Whereas pension income is generally taxed as income, investment returns can often be structured more tax efficiently. However, capital withdrawal also introduces investment and market risk. The optimal solution depends on individual circumstances and should be evaluated carefully. We would be pleased to assist with this assessment.
What Happens to My Assets Upon My Passing?
Upon passing, assets generally form part of the estate and are transferred in accordance with applicable inheritance laws or testamentary provisions. As part of our wealth planning and succession planning services, Zeltner & Co supports clients in structuring the orderly transfer of wealth and can, where desired, assist with estate planning and executor services to ensure an orderly settlement in accordance with their wishes.
What Should I Know Before Meeting with an Independent Wealth Manager for the First Time?
No prior investment knowledge is required for an initial meeting. We work with prospective clients regardless of their level of experience and take the time to explain the entire process in a clear and accessible manner. This includes the initial consultation, a tailored investment proposal, account opening and the subsequent construction and implementation of the investment portfolio. Our objective is to ensure that clients fully understand the proposed strategy and feel confident at every stage of the relationship.