The licence of the portfolio manager: Articles 17 to 24 FinIA

Definition, legal form and tasks

A portfolio manager under FinIA is anyone who, on a commercial basis, can dispose of the assets of clients in their name and on their behalf (Art. 17 para. 1 FinIA). The decisive element is the power of disposal. Whether the assets are securities, deposits, precious metals or Kryptowerte und Digital Assets is irrelevant, and so is whether the client signs each decision or grants a general mandate. A person who only advises and leaves every decision to the client is an investment adviser and needs no FinIA licence, although he remains subject to FinSA.¹

The portfolio manager must be organized as a sole proprietorship, a commercial enterprise or a cooperative and must be entered in the commercial register (Art. 18 FinIA). In Lugano the typical form is the società anonima (SA), the Swiss company limited by shares, with a share capital of at least CHF 100,000 to meet the capital requirement. Its core task is the management of individual portfolios. It may also give investment advice, prepare portfolio analyses and offer financial instruments (Art. 19 para. 3 FinIA).² The ordinance adds operational duties. The manager must ensure that client assets are held separately for each client with a bank, a securities firm, a DLT trading facility or an equivalent foreign supervised institution. The client's authorization to manage must be given in writing or in another form demonstrable by text and must be limited to administrative acts, with any further powers documented separately. The manager must prevent relationships from becoming dormant and ensure that dormant assets reach those entitled to them (Art. 24 para. 1–3 FinIO).³

The limitation of the power of attorney to administrative acts has practical consequences. A manager in Lugano may buy and sell securities in the client's account, subscribe to funds and give foreign exchange instructions. He may not, without a separate and documented authority, transfer assets out of the account to third parties, including to himself or to companies he controls. Custodian banks implement this distinction through their standard forms of limited power of attorney for external asset managers, which allow management transactions and the debiting of agreed fees but exclude withdrawals and transfers.⁴

Qualified managers and continuity

The management of a portfolio manager must consist of at least two qualified persons (Art. 20 para. 1 FinIA). One person is sufficient if the continuation of the business is guaranteed (Art. 20 para. 2 FinIA). A qualified manager must have at least five years of professional experience in portfolio management for third parties, or in trust administration for a trustee, and at least forty hours of training in the relevant field. He must keep his knowledge up to date through continuing education. The firm must have a plan to continue its business if the qualified manager becomes unavailable or dies, and clients must be informed if an external person is engaged for this purpose. FINMA may grant exemptions for good reasons (Art. 25 FinIO).⁵

The continuity rule was designed for the one-person firm that dominates the market in Lugano. A sole fiduciario aged sixty-five, who has managed the assets of thirty Italian families for decades, may obtain a licence if he can show that another qualified manager, inside the firm or under a contract with another licensed firm, will take over if he cannot continue. In practice the supervisory organisations and FINMA examine these arrangements closely, because the death or incapacity of the only manager is the most common risk to clients of small firms. The question of succession, which Chapter K.II treats as one of the structural problems of the Lugano market, is therefore also a licensing question.

Notes

1. FinIA (above), Art. 17 para. 1; on investment advisers as financial service providers under FinSA see FinSA (above), Art. 3 let. c No. 4, https://www.droit-bilingue.ch/en-it/9/95/950.1-3-6.html. ↩
2. FinIA (above), Art. 18 and 19. ↩
3. FinIO (above), Art. 24 para. 1–3, https://lawbrary.ch/law/art/FINIV-v2023.01-en-art-24. ↩
4. Description of market practice; the custodian banks' standard forms are not public and vary between banks. ↩
5. FinIA (above), Art. 20; FinIO (above), Art. 25, consulted at https://lawbrary.ch/law/art/FINIV-v2023.01-en-art-25. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.