The wealth management industry will consolidate next year and seek to offer better protection to clients’ capital in the wake of the financial crisis, said Beat Wittmann, chief executive officer of Dynapartners, a Swiss investment firm, according to Bloomberg.

Mr Wittman was, until last November, Julius Baer’s head of investment products. He founded Zurich-based wealth manager Dynapartners in June. He said mergers among money managers will be driven by “defensive, reactive motives” to increase earnings rather than attract new clients.

In a “paradigm shift,” money managers will also become more focused on wealth preservation and outperforming cash, rather than more traditional benchmarks, Mr Wittmann said. The global financial crisis has slashed client assets and paralysed investors concerned that markets may decline further, a survey by Barclays’ private banking unit reported last month.

“We have to make cash and beat cash, and that’s going to be a challenge to a whole generation of wealth managers,” Mr Wittmann was quoted by the newspaper as saying in an interview. “If that’s delivered, then clients will be prepared to pay competitive prices and quality providers will be able to charge a premium,” he said.

With the worst of the financial crisis over, the main beneficiaries in the wealth-management industry include Goldman Sachs, Pictet and Boston-based Wellington Management, Mr Wittmann said.