Zurich, 9 April 2018 – Succession planning is an integral part of business management. Very often the handover to the next generation takes place in parallel with the owner-manager's own retirement. Thinking about this step thus becomes a double burden from an emotional viewpoint. Business owners should nevertheless keep in mind the significance of early planning and communication for all parties involved. Typically, a large amount of capital, let alone passion and time, is invested in the company. A carefully planned strategy, which transfers the invested capital back into private assets, increases financial security at retirement age. Early planning also means that the company structure can be adapted to ensure a successful handover. In many cases, these two steps can result in tax benefits. Business partners and employees also benefit from planning certainty and increased trust in the new business management if the changeover is not abrupt.

Many business owners not well prepared for succession
In the course of the half-yearly survey, UBS economists asked 350 company owners about succession planning. Age, or the period for which the owner intends to remain active, are the factors most frequently mentioned as triggers for thinking about business succession. More than 80% of bosses who are planning to hand over the business in more than 10 years' time have not yet thought about succession, or only to some extent. Yet even as succession impends, around two thirds of respondents are only partially prepared for succession that is planned within one to three years.

Securing jobs more important than a maximum selling price
Also noteworthy is that a majority of owners consider the succession process as successful if no jobs are lost or relocated, and the business philosophy is continued. These two aspects are weighted higher than maximizing the selling price. Yet around 40% of surveyed owners are dependent on obtaining a certain level of sale proceeds in order to secure their retirement provisions or to pay off family members. "It is important to start early with succession planning, as good preparation is everything," says Axel Lehmann, President UBS Switzerland. "Succession planning must be addressed holistically, by taking into account factors such as retirement provision, taxes, but also company structure and impact on the family."

High economic growth expected
UBS economists expect that the solid global economy and a weaker Swiss franc will support Swiss exports and capital expenditures this year, helping the Swiss economy to achieve growth of 2.4%. At 0.6%, inflation is expected to be slightly higher than last year. While rising oil prices supported inflation in 2017, this year the weaker Swiss franc is likely to lead to small increases in consumer prices. With a robust global economy, there is less demand for Swiss francs as a "safe haven". This is why Daniel Kalt, UBS Chief Economist Switzerland, forecasts a further weakening of the Swiss franc against the euro to 1.22 in the next 12 months. This will give the Swiss National Bank the opportunity to make a first interest rate hike in December. However, Swiss prime rates will return to positive territory in 2020 at the earliest. Nascent fears of inflation in industrialized countries have led to a significant increase in interest rates at the beginning of the year. This increase has already factored in a large part of the monetary policy normalization. As a result, UBS economists only expect a slight rise in interest rates this year.

UBS Swiss economic forecasts

Source: Seco, UBS

In developing the UBS CIO WM economic forecasts, UBS CIO WM economists worked in collaboration with economists employed by UBS Investment Research. Forecasts and estimates are current only as of the date of this publication and may change without notice.


UBS outlook Switzerland: www.ubs.com/outlook-ch-en
UBS publications and forecasts for Switzerland: www.ubs.com/investmentviews

UBS Switzerland AG


Media contact

Daniel Kalt, Regional CIO Switzerland
Phone +41 44 234 25 60, daniel.kalt@ubs.com

Sibille Duss, UBS Chief Investment Office WM
Phone +41-44 235 69 54, sibille.duss@ubs.com

Jackie Bauer, UBS Chief Investment Office WM
Phone +41 44 239 90 61, jackie.bauer@ubs.com