FINMA Enforcement: Wendelspiess Partners AG Industry Bans and Client Harm

Switzerland's financial regulator has concluded a significant enforcement action against Wendelspiess Partners AG, finding systematic failures across conflict-of-interest management, suitability assessment, and disclosure obligations. Two responsible individuals now face long-term industry bans, the firm's portfolio manager licence is being withdrawn, and a fund holding more than CHF 83 million in client assets at the end of 2024 is facing the prospect of a total loss. For accounting firms, auditors, and CFOs advising Swiss-licensed entities, the case sets out in precise terms how conduct breaches compound and how regulators respond when client interests are repeatedly subordinated to those of the firm.

How the Case Reached FINMA

Initial referral and supervisory response

The proceedings did not begin with a client complaint. A report from the relevant supervisory organisation flagged early warning signs: clients of Wendelspiess Partners AG were concentrated in a foreign fund the firm had established and managed in-house since 2021, and that fund was experiencing material liquidity problems. FINMA also identified indicators of shortcomings in risk disclosure, suitability checks, and conflict-of-interest handling.

In early 2025, FINMA opened formal enforcement proceedings and appointed an investigating agent as a director of the company. It froze all accounts and custody accounts held by the firm and barred the former directors from conducting transactions. Those interim measures remained in place throughout the investigation.

What the investigation uncovered

The probe revealed that the fund managed by Wendelspiess Partners AG channelled the majority of its investments into a single investment company domiciled in the canton of Zug, along with that company's affiliated entities. The fund also extended loans to those same companies. Crucially, Wendelspiess Partners AG itself and several of its directors held personal stakes in the fund, creating a web of undisclosed or inadequately disclosed conflicts of interest.

The Core Conduct Breaches

Conflicts of interest: disclosure that never happened

Under the Swiss Financial Services Act (FinSA), portfolio managers carry a clear obligation to identify, manage, and disclose conflicts of interest to clients. FINMA found that Wendelspiess Partners AG either failed to inform clients about the personal and financial links between the firm, its directors, and the fund at all, or disclosed them in a way that was wholly inadequate. That gap constitutes, in FINMA's assessment, a serious breach of the FinSA's conduct-of-business rules.

The structural problem was straightforward: the fund was insufficiently diversified, concentrating risk in a narrow cluster of related entities. A proper conflict-of-interest framework would have required clients to understand that the people managing their portfolios had a personal financial interest in the vehicle those portfolios were being placed into.

Suitability assessments that were never carried out

FINMA's findings on suitability are striking. More than 400 clients were affected, most with only moderate to limited financial knowledge, and many of whom had identified themselves as risk-averse. Despite that profile, the investigation found that Wendelspiess Partners AG had completely failed to carry out the required suitability assessments before recommending or executing investments in the fund. Almost all client funds were placed into the fund regardless, without adequate client consent.

FinSA requires portfolio managers to assess whether an investment is suitable for each individual client before proceeding. Ignoring that obligation entirely, for a client base that was largely unsophisticated and risk-averse, represents one of the most straightforward forms of conduct failure a regulator can identify.

Information withheld from FINMA itself

Beyond the client-facing failures, FINMA found that the firm withheld relevant information from the regulator, including during the licensing procedure. This breach of the duty to inform the supervisory authority is treated seriously because it undermines the integrity of the authorisation process itself. FINMA cited multiple instances.

The Outcomes: Bans, Licence Withdrawal, and Bankruptcy

Individual bans and corporate consequences

FINMA has imposed long-term industry bans on two individuals identified as responsible for the breaches. The firm's licence to act as a portfolio manager is being withdrawn. Wendelspiess Partners AG in liquidation is now in bankruptcy. The ruling is not yet final and may be appealed to the Federal Administrative Court.

The fund itself, which had assets under management of over CHF 83 million at the end of 2024, is described by FINMA as now facing the prospect of a total loss. That outcome flows directly from the concentration risk the firm created by funnelling client assets into an undiversified, related-party vehicle without adequate disclosure or suitability checks.

What This Means for Advisers and Compliance Teams

Conduct obligations under FinSA are not formalities

The Wendelspiess Partners AG case is a clear illustration that FINMA treats FinSA conduct obligations as substantive requirements, not box-ticking exercises. Suitability documentation, conflict-of-interest registers, and disclosure records must reflect genuine assessments, not post-hoc paperwork. When those records are absent or inadequate, FINMA's enforcement tools, including account freezes, investigating agents, licence withdrawal, and personal bans, are used in combination.

Related-party structures demand heightened scrutiny

Where a firm, its directors, or affiliated entities have a financial stake in products recommended to clients, the disclosure and governance bar is higher, not lower. The Wendelspiess structure, in which the firm and its directors held shares in the same fund being sold to clients, required an especially rigorous conflict-of-interest framework. The complete absence of such a framework is what elevated this from a compliance gap to a serious breach.

Supervisory reporting is a first line of detection

This case did not surface through a client complaint or a media report. It began with a referral from a supervisory organisation. For portfolio managers and their auditors in Switzerland, that means supervisory organisations are functioning as active monitoring bodies, and their reports carry real enforcement weight. Firms that believe supervisory oversight is a formality have misread how the system works in practice.

Recordkeeping and regulatory transparency are non-negotiable

FINMA's finding that the firm withheld information during the licensing process adds a further dimension. It points to the importance of maintaining transparent, accurate records that can be produced to regulators on demand, including during initial authorisation. For firms using crypto compliance reporting workflows or digital asset accounting software to manage client records, the principle is the same: accuracy and completeness are not optional, they are regulatory obligations.

This enforcement action sits alongside a broader pattern of FINMA asserting its conduct supervision powers. For context on FINMA's approach to sanctions-related obligations for Swiss financial intermediaries, see FINMA's recent sanctions obligations update for Swiss financial intermediaries. The Wendelspiess case also illustrates how related-party and concentration risks can create systemic client harm at scale, a dynamic that regulators globally are increasingly focused on, as seen in how regulators approach AML enforcement across jurisdictions.

Key Facts at a Glance

Summary of findings and outcomes

Frequently Asked Questions

What is a long-term industry ban under FINMA enforcement?

FINMA can prohibit individuals found responsible for serious regulatory breaches from working in supervised financial services roles in Switzerland for an extended period. The duration depends on the severity of the conduct. In this case, two individuals have received long-term bans following findings of serious FinSA violations.

What does FinSA require on suitability assessments?

The Swiss Financial Services Act requires portfolio managers to assess whether a specific investment is appropriate and suitable for each individual client before executing it, taking into account the client's financial situation, investment objectives, and level of knowledge and experience. Failing to carry out that assessment at all, as FINMA found here, is a clear statutory breach.

How did the supervisory organisation referral trigger FINMA action?

Portfolio managers in Switzerland operate under the oversight of a supervisory organisation recognised by FINMA. Those organisations conduct ongoing monitoring and are required to refer concerns to FINMA where they identify material issues. In this case, the referral prompted FINMA to open formal enforcement proceedings and deploy an investigating agent as a company director.

Can the FINMA ruling be challenged?

Yes. FINMA has noted that the ruling is not yet final and that it may be appealed to the Federal Administrative Court, which is the standard administrative law route for challenging FINMA decisions in Switzerland.

What should audit and compliance teams take away from this case?

Three things stand out. First, related-party investment structures require explicit, documented conflict-of-interest disclosure to every affected client. Second, suitability assessments must be individualised, recorded, and completed before any investment decision, not retrospectively. Third, information provided to FINMA, including during licensing, must be accurate and complete. Gaps in any of these areas can escalate from a compliance finding to a full enforcement action with personal liability consequences.

Source: FINMA