Digital asset managers, also called robo advisors, are relatively new in Switzerland. They invest the money for investors in a automated way, making them cheaper. Moneyland.ch has compared various products.
Robo advisors are in vogue. These are not actual robots. As a rule, no advice is offered either. Instead, investors' money is automatically invested in passive products such as exchange-traded funds (ETFs). The risk capacity and risk tolerance of the investors is determined digitally - the money is then invested in different ETFs accordingly. Swiss robo advisors usually use replicating ETFs from the major ETF providers such as iShares, but sometimes also synthetic ones. Rarely, exchange-traded commodities (ETC) are also used for commodity investments. At certain providers, the purchase of individual securities such as shares is possible.
Digital offerings are available for as little as CHF 500
While advice is offered in traditional asset management, this is generally absent in digital offerings. Exceptions are hybrid models that combine the online approach with advisory elements. In contrast to classic asset management, which is often only available for high investment amounts, digital offerings are available for as little as CHF 500 (findependent, Swissquote Invest Easy), CHF 1'000 (Cleverinvest), CHF 2'000 (Selma Finance) or CHF 8'500 francs(True Wealth), as moneyland.ch reports. For the comparison service, Swiss robo advisors are significantly cheaper than traditional private banking mandates. Depending on the amount and profile, the cheapest robo advisors can be up to ten times cheaper than the most expensive private banking offers, moneyland.ch has calculated. It is only even cheaper if the desired ETFs are purchased directly from a low-cost online broker.
Robo-advisors are still barely profitable
Among the largest robo-advisor providers in Switzerland are True Wealth, with more than CHF 800 million in assets under management, and Swissquote's robo-advisor, with more than CHF 400 million. The VZ-Vermögenszentrum already manages more than CHF 2 billion «digitally» (even if it is not a typical robo advisor, as moneyland.ch notes). Overall, however, the assets under management are still relatively low and most robo advisor offerings are thus not yet profitable. However, the experts at moneyland.ch are convinced that the significantly higher costs in traditional asset management will come under increasing pressure in Switzerland. They assume that with the increasing digitalization of everyday life, there will also be a shift from classic to digital and hybrid models in asset management.
Moneyland.ch has compiled a list of the providers operating on the market:
Most Swiss Robo Advisors do not offer investment advice
According to moneyland.ch, all Swiss robo advisors can be contacted by phone for general questions. Only a minority offers contact options directly via app or video call. Most Swiss robo advisors do not offer investment advice. For clients who nevertheless want digital asset management with advisors, there are now a few offerings in Switzerland as well. These so-called «hybrid» models are usually somewhat more expensive than the cheapest Robo Advisors without investment advice. Providers with investment advice include Descartes Finances, Digifolio (BLKB), Postfinance E-Wealth Management, Selma Finance, and volt (Vontobel).
Flat fees in comparison
Account openings and closings are free of charge with all Swiss robo-advisor offers. There are usually no retrocessions. In addition to the product costs, the most important fees of the Swiss digital providers are the so-called flat fees, which can vary considerably depending on the provider. Virtually all Swiss robo advisors have a flat fee model that also includes transaction and custody fees. With individual providers such as Inyova and Kaspar&, the product costs are also included in the flat fees, according to moneyland.ch.
In addition to the flat fees, there are usually product costs
Product costs are charged by many digital asset managers in addition to the flat fees. In most cases, this is the so-called Total Expense Ratio (TER) of the selected ETF. As a rule, it is an average of 0.18% to 0.45% per year that is added on top. For some products, however, the fee is well over 1%, which is more expensive than the flat fee charged by other providers. With some providers, the product fees are included in the flat fees (Inyova, Kaspar&) or at least included for certain strategies (Swissquote for pure equity strategies without additional products).
Additional costs must be taken into account
Investments in foreign currencies may incur exchange rate costs - they can be as high as 1.5%. There are also:
Funds are safe with custodian banks
If a robo advisor provider were to go bankrupt, the investors' money would still be protected, moneyland.ch experts assure, because it would be held in a custodian bank. In the case of True Wealth, the investments are deposited with Saxo Bank (Switzerland) or BLKB. In the case of the bank's own offerings, such as Swissquote's robo advisor, its own house acts as the custodian bank. In the event of bankruptcy of the custodian bank, securities such as ETFs would not fall into the bankruptcy estate, unlike the cash balance. The Swiss deposit guarantee of up to CHF 100'000 applies to the cash balance. In the case of the provider Simplewealth, the investments are deposited with Interactive Brokers in the USA.