In this feature, we talk to a variety of firms and organisations about the Berne Financial Services Agreement which is now in force, and what it means for banks, insurers, wealth managers and others. 

When so much attention is drawn by noisy geopolitics, a development that may have escaped the radar is a “ground-breaking” mutual recognition trade deal on financial services between Switzerland and the UK.
 
The Berne Financial Services Agreement uses “outcomes-based” mutual recognition of domestic laws and regulations to enable cross-border trade in financial services to wholesale and sophisticated clients, as the UK’s regulator, the Financial Conduct Authority, puts it. The agreement was signed in December 2023 and took force on 1 January.

Although a global market access framework for the UK held sway prior to the BFSA, it was more complex. (The previous set-up was called the “Overseas Persons Exchange Exclusion Framework.”)

“The BFSA makes this simpler and it is easier to manage,” Vanessa Dubra (pictured below), head of international at the Swiss Bankers Association, told WealthBriefing in a recent interview. 

Vanessa Dubra 

Swiss banks that meet Swiss regulatory requirements don’t need to be separately regulated in the UK, and vice versa. “For Swiss institutions not yet in the UK, it offers easier access to the UK – particularly for smaller banks,” she said. “This agreement is not just about the relationship between Switzerland and the UK…it could serve as a model for other financial markets.”

At PIMFA, the UK-based wealth management industry association, the message about the BFSA is positive.

“The Berne Agreement is groundbreaking – it uses outcomes-based mutual recognition of the UK and Swiss regulatory and supervisory frameworks, rather than harmonisation of rules and, by doing so, opens a new chapter in cross-border trade in financial services,” Maja Erceg, senior policy advisor for EU and government affairs at PIMFA, told this publication.

“For our member firms – UK wealth business – we see this as an opportunity to expand market access and secure new business without the additional challenge and cost that come from meeting specific Swiss regulatory requirements or from securing presence in Switzerland. “Most obviously, UK client advisors will now be able to serve high net worth individuals in Switzerland without registering in Switzerland,” she continued. 

“We see this agreement as giving UK firms an advantage over many international firms who may have to obtain authorisation and deal with various other restrictions to operate in Switzerland. We hope that the framework that is now in place will serve as an incentive for firms and encourage them to be proactive and use this opportunity to expand the client base into another jurisdiction,” Erceg added.

Familiar faces
Swiss banks and other financial institutions are familiar faces that operate in London as well as the UK regions, such as UBS, Julius Baer, Pictet, Lombard Odier and Mirabaud, for example. UK-headquartered banks with operations in Switzerland include Barclays Bank (Switzerland) SA; Barclays plc; HSBC Private Bank; HSBC Bank; IG Bank SA; Investec Bank (Switzerland) AG; Rothschild & Co Bank AG; Schroder & Co Bank AG; Morgan Stanley plc London, Zürich branch; JP Morgan Securities plc London, Zürich branch; Goldman Sachs International London, Zurich branch; and Citigroup Global Markets plc London, Zurich branch.

The pact opens the prospect of expanded financial services trade and capital flows between two European countries that aren’t in the European Union (although Switzerland does have membership of the Single Market and Schengen area). The deal is taking force almost 10 years since the UK public voted to leave the EU.

The City of London

The Swiss government told WealthBriefing that the agreement is significant. 

“This agreement between two important European financial centres is a clear commitment to open financial markets and opens up new opportunities for cross-border cooperation. Now we look to the private sector to profit from the potential of the agreement," Daniela Stoffel, State Secretary for International Finance at the Federal Department of Finance, Switzerland, said in an emailed statement to this news service.

Federal government building, Berne

WealthBriefing asked Duncan MacIntyre (pictured below), partner at Lombard Odier, UK, what a bank that operates in both countries thinks of the accord. MacIntyre is UK region head at Lombard Odier and leads teams across London, Geneva, Zurich and the Bahamas.

Duncan MacIntyre

"While the largest UK and Swiss firms doing business in each other’s countries are already regulated and registered in these places – which means the Berne accord may have limited impact on what they do – it could potentially be more significant for independent wealth managers and others looking to get into these markets," he said.

The deal tightens trade relations between the UK, home to the world’s largest onshore financial hub (London) and offshore one (Switzerland). The UK is also home to plenty of offshore wealth as well, if one assumes the cross-border nature of a chunk of it. According to Boston Consulting Group last year, the UK mainland is home to $1 trillion of cross-border wealth; if jurisdictions that are linked to the UK, albeit with a level of autonomy are included, that takes the figure to about $2.6 trillion (The Bahamas, Channel Islands and Isle of Man, Cayman Islands). Switzerland had a total of $2.7 trillion. And that is just the cross-border part – it does not include the domestic wealth in both countries.

Cross-border centres, ranked

Source: BCG

“You have got the largest onshore financial centre – the UK – and the largest offshore financial centre – Switzerland – coming together,” MacIntyre said.

From the Swiss perspective, the Berne accord is more about the opportunities for private banking and wealth management; on the UK side, this has more potential for its insurance industry, he continued. “It creates a new paradigm. It says `you respect our laws and we will respect yours’. At the broad level, this [mutual recognition of standards approach] is a brilliant idea,” he said.

Streamlining
“The BFSA streamlines regulatory requirements by reducing duplicative licensing and compliance obligations, enabling financial institutions to operate in the counterpart jurisdiction largely on the basis of their home-state regulatory regimes,” Dr Ariel Sergio Davidoff (pictured below), LLM, TEP, told WealthBriefing.

Ariel Sergio Davidoff

“Swiss financial institutions are therefore well positioned to strengthen their competitive standing in the United Kingdom. The agreement enhances access to one of Switzerland’s most significant wealth management export markets and allows Swiss banks to service UK high net worth clients with greater legal certainty, without the need for local authorisation,” he said. 

High net worth – now an official concept
The agreement allows Swiss financial services suppliers in particular to provide cross-border investment services for professional and “high net worth” clients in the UK in selected areas. 

Interestingly, the concept of “high net worth” is now given a kind of official status for regulatory purposes. According to the FCA’s own account of this point, it says “To provide registered services under the BFSA to a natural person who wishes to be treated as a high net worth client, the agreement requires a Swiss firm to satisfy that such a client has net assets of £2 million ($2.71 million) or more.”

British insurance companies can provide cross-border services in Switzerland in selected areas of non-life insurance. In the area of financial market infrastructures, the BFSA facilitates the recognition of central counterparties, strengthens cooperation between parties about trading venues, and simplifies certain requirements for over-the-counter derivatives. In the area of asset management, the agreement sets out the regimes already in force in Switzerland and the UK.

Conversations with bankers and others suggests that industry players will take time to work out exactly how the system works in practice, and how much, for example, will a Swiss-regulated bank or independent asset manager need to do in compliance and reporting terms with the UK’s FCA, and vice versa for UK-based firms seeking to enter the Swiss market.

Preparations
Swiss banks are getting ready. 

“Swiss banks have already begun implementing the agreement. However, as some guidelines were only published in autumn 2025 and the Memorandum of Understanding between the UK and Swiss supervisory authorities was signed only last September, the process remains at an early stage,” the Swiss Bankers Association’s Dubra said. 

“Some [firms] have been preparing the business cases and some will do so in the next few months,” she said. 

Kerstin Mathias, director of international affairs at UK Finance, a London-based trade body representing UK banks, is optimistic.

“We are very positive about it. We see it as setting a gold standard of an agreement between two well-regulated and sophisticated financial centres,” she said. There is a “side-letter” in the agreement – originally signed by the previous UK government – giving scope for new areas to be covered in time.

Corridors
The agreement also highlights how jurisdictions, in pushing to gain a market edge and adjust to new circumstances, carve out trade “corridors” – a theme this news service has explored. 

For Switzerland, the pact has taken place when relations with the EU haven’t always been easy. Switzerland has a mass of bilateral treaties with the EU on topics as varied as transport, free movement and agricultural trade. The EU wanted to sweep all these into a framework pact. Switzerland is not likely to ratify new agreements before 2027 and will have to hold a referendum first.

At the margins, the BFSA may give a bit of export revenue hope for firms in the UK seeking new markets. Even allowing for the loss of some UK resident non-domiciled wealth from the UK since the system was closed off by the current government, some of those persons might have moved to Switzerland – so they remain in the mix as potential clients.

Switzerland, for its part, has had to adjust over the past decade after its bank secrecy laws – at least when used by non-Swiss people – ended. (Bank secrecy remains very much in force for Swiss citizens, however.)

Davidoff said the Berne deal will influence the kind of treatment clients receive. 

“These regulatory simplifications are anticipated to influence client-servicing models, enabling cross-border private bankers and advisors to engage with clients remotely or via periodic on-site visits, rather than maintaining a permanent local presence,” he said. “In the asset management sector, the BFSA affirms existing cross-border fund distribution and delegation arrangements, creating opportunities for innovative product offerings and closer collaboration between UK and Swiss firms under a more permissive delegation framework.

“We are observing keen interest from a range of market participants, particularly from a technical perspective, with many seeking clarity on the practical implementation steps required prior to entering the UK or Swiss market. As reflected in the practical guidance, the initial steps will invariably involve legal analysis and clarification to ensure compliance. There is no expectation of rushed action; rather, a measured, step-by-step implementation approach is envisaged,” Davidoff said. 

Predictions
PIMFA’s Erceg said the removal of regulatory barriers to UK firms who wish to operate in Switzerland is “clearly the most important aspect of this agreement.”

“Costs associated with administration are a hugely important factor in any cross-border business, and the removal of these barriers should create unhindered market access and new opportunities for wealth managers. 

“However, it’s important to note that the agreement is not set up to ensure trade flows in one direction. To this end, it may be that the most important aspect of the agreement for UK wealth firms is the £2 million threshold HNW individuals need to meet to be classified as professional by a Swiss firm.

“In this context, it’s important to note that the FCA is currently consulting on client categorisation rules in the UK, and whilst we are supportive of the regulator’s intention to refresh the requirements to opt clients up to professional status, their proposed threshold of £10 million is significantly higher. The risk remains that agreements such as the Berne agreement may place the UK at a competitive disadvantage going forward,” she said. 

Trade still humming     
Almost a decade on from Brexit, the Swiss pact with the UK, along with other trade deals that countries have signed up to, perhaps pushes back against the idea that globalisation of financial services is in retreat.

“The UK’s position as the world’s leading financial centre is underpinned by its adherence to global standards and its openness to cross-border trade. In the post-Brexit world, the agreement shows that the UK can build coalitions with other nations in Europe in the pursuit of closer economic ties and growth,” Erceg said. The agreement moves from the traditional EU-style equivalence to deference – a more flexible model allowing firms to do business in other markets following their home country's regulations. This provides businesses with much needed legal certainty.

“The dynamic character of the agreement is important, and we welcome the intention to expand its sectoral coverage to include sustainable finance in the future too. The two sides have committed to develop internationally comparable standards for climate-related corporate disclosures and to align financial flows with the goals of the Paris Agreement. This is encouraging as working across borders is nowhere more important than in sustainable finance,” Erceg concluded.

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