Multi-Depot Switzerland: Identify concentration risks with consolidated reporting

For reasons of security and risk diversification, wealthy individuals, entrepreneurs, and families in Switzerland often distribute capital ranging from CHF 1 million to 5 million across two or three different institutions—for example, a major bank, an established cantonal bank, and a traditional private bank. The primary goal of this strategy is to reduce counterparty risk.

While this sounds like prudent diversification in theory, it often proves to be a costly error in practice when managed without overarching oversight. When multiple banks manage assets without knowledge of the other mandates, an administrative and strategic blind spot is created. Instead of genuine risk diversification, the result is often double fees, unintended concentration risks, and eroded net returns.

Key takeaways at a glance:

• The diversification illusion: While splitting capital across multiple banks reduces counterparty risk, it creates massive, unnoticed concentration risks if there is no central oversight.
• The cost effect: Multiple banking relationships multiply fixed base fees, custody charges, and transaction-related friction costs (total cost of ownership).
• The tax and risk vacuum: Without an aggregated overall view, it is impossible to manage the global risk profile (Value at Risk) or tax loss offsetting across different institutions.
• The consolidation solution: Independent multi-custodian reporting aggregates all banking relationships into a central risk matrix—while allowing you to keep your existing custodian banks.
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The diversification illusion: When three portfolios carry the same risk

The basic assumption behind splitting assets across multiple portfolios is that more banks mean more security. However, if each bank independently implements a standard balanced or growth mandate, the advisors often rely on nearly identical asset management models.

This leads to the phenomenon of unconscious portfolio overlap:

• Multiple purchases of the same SMI blue chips: Bank A buys Nestlé, Roche, and Novartis for your portfolio. Bank B does exactly the same based on the same research considerations. Bank C allocates Swiss blue chips via an in-house investment fund. In aggregate, you hold a massive concentration risk in just a few major Swiss corporations.
• Correlation collapse in a bear market: In the event of global market turmoil, various bank mandates correlate almost perfectly. The perceived security of bank diversification dissolves, as all institutions are subject to the same macroeconomic misjudgments or procyclical sell-offs.

Mathematically effective risk management does not look at the number of bank logos, but at the correlation of the underlying individual assets across the entire portfolio.

The hidden costs of fragmentation (Total Cost of Ownership)

An underestimated performance driver in multi-bank relationships is the accumulation of physical and implicit costs. Those who keep their assets fragmented pay twice in many areas:

1. Tiered fees & minimum retainers: Banks grant fee discounts on custody fees and management mandates based on the consolidated volume. Someone who distributes CHF 3 million across three institutions (CHF 1 million each) pays the full rates for the lower volume segment at every bank, instead of falling into a significantly cheaper fee tier with a total mandate of CHF 3 million.
2. Multiple product costs (TER): Each institution prefers to use its own in-house funds or preferred third-party funds. This leads to an accumulation of management and fund costs that could be avoided through direct, targeted asset selection.
3. Transaction netting: Without global transaction monitoring, unnecessary costs arise from offsetting trades: Bank A sells a stock to raise liquidity, while Bank B buys the same stock on the same day. The client pays brokerage fees and stamp duties in both cases—without any strategic added value.
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System comparison: Fragmented multi-banking vs. consolidated management

To clarify the operational and structural differences, the following comparison shows the impact on the overall asset architecture:

Risk monitoring

• Fragmented multi-banking (DIY): Isolated per bank. No knowledge of the overall risk matrix.
• Consolidated multi-custodian management (Format): Aggregated multi-custodian reporting with comprehensive stress testing.

Concentration risk prevention

• Fragmented multi-banking (DIY): Unconscious double or triple purchases of the same stocks/sectors.
• Consolidated multi-custodian management (Format): Systematic exclusion principle for overlaps across all banks.

Fee structure

• Fragmented multi-banking (DIY): Higher individual fees due to split investment amounts.
• Consolidated multi-custodian management (Format): Negotiation of institutionalized terms and no proprietary products.

Tax alpha

• Fragmented multi-banking (DIY): Gains and losses are not optimized across institutions.
• Consolidated multi-custodian management (Format): Holistic coordination of loss offsetting and capital distribution.

Administrative burden

• Fragmented multi-banking (DIY): Hundreds of bank documents, performance reports, and tax statements.
• Consolidated multi-custodian management (Format): A single, clear consolidated report for your entire wealth.
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The added value of independent multi-custodian reporting

The solution to this dilemma does not require terminating your established banking relationships. The principle of multi-custodian reporting allows you to maintain the security and history of your existing custodian banks (such as ZKB, UBS, or Bär) unchanged, while delegating strategic management to a central, independent architect.

In this capacity, a independent asset manager as a neutral entity that stands above individual institutions:

• Centralized risk management (risk budgeting): We aggregate all accounts within a consolidated system landscape. The overall risk (volatility, currency exposure, sector weighting) is monitored and balanced in real time at the portfolio level.
• Holistic tax optimization: Gains at Bank A can be offset against realized losses at Bank B. Furthermore, high-dividend Swiss stocks with tax-free capital contribution reserves (KER) are centrally coordinated to minimize your income tax burden.
• Negotiating power: As a major client dealing with custodian banks, an independent manager negotiates special institutional terms for custody fees and brokerage commissions that are unavailable to individual private investors.
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Conclusion: From blind spots to strategic sovereignty

Distributing assets across multiple institutions is a valid tool for reducing counterparty risk—but it becomes a drag on performance when coordination is lacking. Managing a multi-million-dollar fortune without a consolidated overview is like flying blind through complex market cycles.

Top rankings in independent comparisons (such as the long-term BILANZ investment rating over 60 months) demonstrate that first-class overall returns are not achieved by accumulating random bank mandates. They are the result of a clear, independent asset architecture that eliminates concentration risks, drastically reduces the total cost of ownership, and manages your wealth as an organic whole.

Eliminating blind spots: Putting your total wealth to the test

The strategic consolidation of scattered accounts from CHF 500,000 requires far more than simply collecting bank statements. It demands a deep understanding of cross-institutional correlations, fee efficiency, and uncompromising risk management that proactively protects your total capital.

Format Vermögen & Anlagen AG supports you at our locations in Zurich, St. Gallen, Basel and Lucerne with independent expertise to help you consolidate your scattered assets into a transparent, unified architecture. Our risk-adjusted and consolidated approach consistently delivers outstanding long-term results, as evidenced by our latest awards 2026. We bring order to your banking relationships, eliminate costly overlaps, and negotiate optimization opportunities with your custodian banks—transparently and free from any proprietary product interests.

→ Schedule your free, no-obligation initial consultation today, tailored specifically to your asset structure initial consultation.