"The first half of 2008 has seen a notable change in client expectations and investment choices," said Peter Braunwalder, chief executive of HSBC Private Bank (Suisse), the British-based bank's main affiliate catering to the ultra-rich.

"Faced with inflation worries, volatile asset prices and sudden changes in exchange rates, a majority of investors have reduced their transaction volumes in equities, bonds, and structured products," he told a news briefing in Geneva.

This was particularly true for clients from Asia, whose demand for complex investment tools such as equity derivatives has "drastically decreased" in response to recent financial market upheaval, said Braunwalder.

"Concurrently, most clients increased their cash allocation and, for some, their leverage," he added.

Investors worldwide have been scrambling to find a safe place for their savings this year in the face of a global economic slowdown, a credit crisis that has spooked markets, and an energy price spike spurring concerns about inflation.

Alexandre Zeller, who will replace Braunwalder as HSBC Private Bank (Suisse) chief on October 1, said that concerns about inflation would dominate many investing decisions ahead.

"My worry is that a lot of liquidity has been injected in the markets by central banks to solve the (credit) crisis," the former head of Banque Cantonale Vaudoise said, raising concerns about how that liquidity will be removed from the market, and whether interest rates would have to rise as a result.

HSBC Private Bank (Suisse), rated AA by Standard and Poor's and Aa3 by Moody's, has been more shielded from recent banking sector woes than its larger Swiss rivals UBS and Credit Suisse.

But the Geneva-based bank said the first six months of 2008 were necessarily arduous in light of "the most difficult financial markets for several decades."

"Record levels of volatility across asset classes and markets have made clients more hesitant to move their assets between financial institutions," it said.

Assets under management decreased by 13 percent or 23.8 billion Swiss francs ($21.7 billion) to 162 billion Swiss francs, compared to December 2007, due both to unfavorable markets and the drop of the U.S. dollar against the Swiss franc.

Net new money flows were 6.9 billion francs in the first half, with most funds coming from Europe, the Middle East, and Asia, the HSBC unit reported. Zeller said he considered that inflow "substantial" and stood by the bank's goal to grow assets under management by 60 percent over the next three years.

"I think this is something that we can achieve," he said.