Switzerland and Luxembourg are now among the preferred locations for large international families seeking wealth management solutions. Serving ultra-high net worth clients, the two financial centres compete with each other, but also regularly act in a complementary fashion. Many banks with Swiss roots have developed a presence in Luxembourg over the last three or four decades.
Geneva-based global wealth and asset manager Lombard Odier is active in the Grand Duchy through three entities. "Private banking in Luxembourg has existed for around fifteen years. That seems anecdotal compared with the longevity of our parent company, which will celebrate its 230th anniversary in 2026," points out Lombard Odier Europe CEO 
Two places, same clients
If these Swiss banks have decided to set foot in Europe, is above all to be closer to families and entrepreneurs, and to be better able to support them. "Realising the potential of Luxembourg, Lombard Odier decided to make the Grand Duchy a European platform for organising all our business across the single market, from Antwerp to Milan, via Paris, London and Madrid," explains the group's managing partner, Xavier Bonna.
To serve clients and, more specifically, to take commercial approaches to wealthy families resident in the European Union, Swiss banks need to have an entity established within the single market. "Luxembourg has proved to be more dynamic in its approach than other centres, due in particular to a fluid and constructive dialogue with the authorities, implementing a pragmatic approach," continues Jessica Rabut.
This "pro-business" positioning, which can also be found in Switzerland, has greatly contributed to Luxembourg's dynamic around private banking. The financial centre has been able to take advantage of the regulatory framework in force to develop a high value-added offering, geared towards the wealthiest individuals, and in particular those who would have willingly turned to Switzerland until recently.
"In many respects, the two markets share important similarities," notes Xavier Bonna: "Firstly, both Luxembourg and Switzerland stand out for their international openness, an ability to serve clients from different cultures, in their respective languages. Both places also boast solid expertise in the financial and banking fields, particularly with cross-border clients. In addition, the political, legal and fiscal stability of Switzerland and Luxembourg make them havens for wealthy clients operating in a particularly uncertain world.
Swiss banks in Europe
If Luxembourg and Switzerland are similar, where do they differ? "The two centres do not have the same level of maturity," observes Jessica Rabut, pointing to the longevity of the Swiss banking business, which is 200 to 300 years old, whereas the Luxembourg financial centre has only existed for around 60 years. "Switzerland's international orientation is also more pronounced, whereas our Luxembourg clients remain mainly European," she continues.
Based on the value proposition of the two centres, we can also point to divergent notes in the way clients are supported. "Switzerland attracts wealthy clients primarily because of its discretionary management services, advice and wealth planning, based on a personalised approach," says Xavier Bonna, "but without making generalizations, Luxembourg has attracted wealthy clients primarily because of its full range of asset management and structuring services, its range of investment vehicles and its life insurance offering. It is these elements that have made the Place's trademark."
Connecting models
These differences, however, fade over time, as competition brings the two markets into line with each other - with Switzerland developing flexible vehicles and Luxembourg developing a robust wealth management offering.
The "Private Banking Report 2025", produced by KPMG with the ABBL and the CSSF, shows that the two centres continue to prosper: the volume of assets under management (AuM) continued to grow in 2023 and 2024. Activity in Luxembourg, accounting for €756 billion in AuM, is only a fraction of that of its big Swiss sister, which looks after CHF3,352 billion (around €3,634 billion).
According to the survey, if we compare net capital inflows (net new money), the growth dynamic is more favourable for the Luxembourg financial centre (+4.2% in 2024, +2.6% for Switzerland). For Xavier Bonna, Luxembourg's slight advantage can be explained by its maturity. "Given the level of assets under management already achieved in Switzerland, grabbing additional growth points is proving more complex. The Grand Duchy, on the other hand, is benefiting from a European entrepreneurial dynamic that has tended to strengthen in recent years," he points out.
For Lombard Odier's directors, the two markets are set to continue to grow together, by jointly offering a range of services tailored to the needs of each. "Today, clients can choose freely from among our ten booking centres around the world, depending on their needs or geographical location. Like many of our peers, we act as a global player. Between Geneva and Luxembourg, we can offer them the best of both worlds," explains Jessica Rabut.
Talents and costs under pressure
And if they are to continue to perform well in the future, the two financial centres will have to rise to a number of challenges. Their future development will depend in particular on their ability to strengthen their teams. "The CEO of Lombard Odier Europe stresses that "while both countries have a lot going for them, with attractive living environments and favourable tax structures, attracting talent on a long-term basis also means strengthening the academic training on offer, and the presence of schools with a strong financial focus. "In Luxembourg, the creation of a master's degree in wealth management at the University of Luxembourg is an opportunity. But students are still not very familiar with it. Swiss academic courses are significantly more extensive."
Containing costs is another major challenge. According to the KPMG survey, which analyses the cost/income ratio of Swiss and Luxembourg banks, Luxembourg performs slightly better in this area. "On the whole, we are all facing this situation, with rising costs for human resources, IT licences and, in recent years, compliance," comments Xavier Bonna, "and while you might think that Swiss regulations are more flexible than those in Europe, there is a tendency for Finma (the Swiss supervisory authority) to align its requirements with those of the single market, to take inspiration from the European framework. It is important to find solutions, particularly technological ones, to meet these requirements while seeking to pool costs."
The Swiss regulator "has beefed up its rhetoric"
Luxembourg's financial centre has a fairly fluid relationship with its regulator, the CSSF. Its Swiss counterpart, Finma, is reputed to be less open to dialogue. After the Credit Suisse debacle and its takeover by UBS in 2023, the Swiss regulator "has recently toned down its rhetoric", observes Xavier Bonna. Despite this, "given the importance of private banking to the Swiss economy, it is essential that the regulator also listens to the market, open to dialogue with its players, with a view to preserving the attractiveness of the financial centre", insists the managing partner.
This article was written for the Wealth management & Private banking supplement of Paperjam magazine’s March 2026 issue, published on 25 February. It is published on the site to contribute to the full Paperjam archive. Click this link to subscribe to the magazine.
