In this article, we show you how digital asset managers differ. We also look at why we believe robo-advisors have fallen short of expectations and what makes finpension better.
Comparison of the best digital asset managers
You can directly compare the three best asset managers currently available in the table:
| finpension | True Wealth | findependent | |
| Features | |||
| Minimum deposit | From 1 franc ✓ | From 8,500 francs | From 500 francs |
| Portfolio management | Up to ten portfolios ✓ | Everything managed via a portfolio ✓ | Unlimited, but minimum amount of CHF 500 per portfolio ✓ |
| Children’s portfolios | Yes, on behalf of the adult account holder ✓ | Yes, on behalf of the child ✓ | Yes, on behalf of the adult account holder ✓ |
| Deposit in foreign currencies | No | Yes ✓ | No |
| Savings plan | Yes ✓ | Yes ✓ | Yes ✓ |
| Withdrawal plan | Yes ✓ | Yes ✓ | No |
| Access to private market investments | Yes, at favourable conditions ✓ | No | No |
| Performance calculation | TWR and MWR ✓ | TWR and MWR ✓ | TWR only |
| Web access and mobile app | Yes ✓ | Yes ✓ | No |
| Biometric login | Yes ✓ | Yes ✓ | Yes ✓ |
| Two-factor authentication | SMS or Auth. app ✓ | Auth. app | No |
| Possibility to add a contact person | No | Yes ✓ | No |
| Fees | |||
| Administration fee | 0.39 % ✓ | 0.25 – 0.50 % ✓ | 0.29 – 0.40 % ✓ |
| Average fund costs (TER) of the standard strategies | 0.08 – 0.10 % ✓ | 0.13 % | 0.12 – 0.25 % |
| Foreign currency fees | No ✓ | Yes, 0.10 % | Yes, 0.50 % |
| Tax-deductible fees | Deposit fee: yes ✓ | Flat-rate fee: usually no | Flat-rate fee: usually no |
| Netting of buy and sell orders | Yes ✓ | No | No |
| E-tax statement free of charge | Yes ✓ | Yes ✓ | Yes ✓ |
| New type of reporting flat-rate tax credit (still has to be approved by the tax authorities, therefore no valuation) | Yes | No | No |
The best asset managers from the group of external asset managers
True Wealth is the digital asset manager that can certainly be described as a pioneer in the market for digital asset management (founded in 2013). The minimum deposit at True Wealth is CHF 8,500, which can represent a certain hurdle. True Wealth’s fees are transparent and low. They range from 0.25 to 0.50 percent, depending on the amount of assets deposited. Added to this are the product costs, which are also very low for the funds used (0.13 percent). As external asset managers can only take over asset management, but not account and custody account management, there are usually additional fees for foreign currency exchange.
True Wealth has developed an exciting tool, a kind of cockpit, with which the investment allocation can be controlled and monitored. This tool is likely to meet with a positive response from tech-savvy investors in particular.
True Wealth’s investment instruments are visible online, which is a positive aspect. Many other providers lack transparency when it comes to investments. We think that’s a shame because nobody wants to buy a pig in a poke. Which investment instruments are used is very important because the range is very wide, especially on the cost side (TER).
Where we see a certain question mark with True Wealth is in the allocation. Specifically, the allocation of investments to different countries and regions. True Wealth only writes that they follow a scientific approach. We don’t know which one. However, the scientific approach means that the allocation deviates significantly from the actual size of the equity markets, as the following table shows:
| End of 2022 (fp employee A) | End of 2023 (fp Employee B) | All Country World Index | |
| Great Britain | 11.5 % | 9.7 % | 3.6 % |
| Europe | 16.3 % | 16.8 % | approx. 10 % |
| Asia / Pacific | 6.8 % | 9.8 % | approx. 2 % |
| Japan | 10.4 % | 14.8 % | 5.3 % |
| Developing countries | 20.5 % | 18.5 % | approx. 10 % |
| USA | 34.5 % | 30.4 % | 63.8 % |
As an alternative, we therefore bring the second-best digital asset manager into play: findependent. The fee at findependent is 0.29 to 0.40 percent, with product costs of 0.12 to 0.25 percent. The allocation of findependent is easier to understand. findependent, however, relies on a rather high Swiss share of around 40 percent. A high share of the home market is also known as home bias. A home bias can lead to a poorer risk/return ratio.
The good news is that if you don’t like the default allocation, you can change it manually with both True Wealth and findependent.
findependent is less established than True Wealth. Investor funds are needed to cover the costs of growth and further technological development. These are to be generated in part via crowdinvesting (as of June 2024).
Best asset manager with a focus on sustainability
If a sustainable investment is more important to you than a good performance, you may find your luck with Inyova. Unlike most robo-advisors, Inyova does not invest in ETFs, but directly in individual companies. 300 to 400 shares are included in Inyova’s investment universe.
Basically, the concept of Inyova is simple. Inyova asks you, the user, what your values are (which is where the name Inyova = In-Your-Valuescomes from). From this, Inyova generates a customised portfolio consisting of 30 to 40 securities. It is therefore nothing more than a filtering of securities based on certain criteria. The different terms used by Inyova for the filters take some getting used to:
- Handprint: Inyova defines the handprint as the ecological and social impact of the products and services that a company manufactures and offers on the market. It is about investing in topics that make the world a better place.
- Footprint: The footprint is about whether the company produces in an environmentally friendly way and treats employees fairly, as can be read on the Inyova website.
- Exclusion criteria: Finally, Inyova allows you to exclude companies that operate businesses that you do not want to support (for example, companies that manufacture weapons). However, we cannot say whether you invest in arms deals if you do not exclude them (the 300 to 400 companies in Inyova’s investment universe are not listed on its website).
Inyova is also actively involved in general meetings of companies in order to voice her concerns for a sustainable and socially just world. However, it is highly questionable whether Inyova has enough power to really make a difference. And if it is of no use, it still costs money. Inyova’s fees of 0.9 – 1.2 percent are therefore rather high for a digital asset manager.
In any case, the biggest question mark with Inyova is its economic sustainability. Although the concept is very simple, the implementation is labour-intensive. Inyova’s latest offering – Inyova Grow – is also a business model that is not easily scalable. Inyova raised seven million francs on the market in 2022. Now it is set to raise up to another six million [note: the funding limit has been reduced to 1.5 million]. In the meantime, assets under management have only increased from CHF 173 million to CHF 250 million.
Best asset manager from the group of banks and investment firms
finpension is the first new provider of asset management with a higher licence as an account-holding investment firm.
The licence as an account-holding investment firm has the advantage that finpension can offer the investment solution independently without having to rely on a bank. Both account and custody account management as well as asset management are carried out by finpension itself.
This has the following advantages for finpension customers:
- finpension does not charge a premium on the exchange rate when money has to be converted into a foreign currency. This is otherwise common practice with banks, which is why clients of external asset managers who work with banks also have to pay the corresponding surcharge.
- finpension can perform netting. Netting is the consolidation of buy and sell orders on the rebalancing day across the entire customer base. Only the net volume is then actually traded on the stock exchange. Netting has the advantage that fewer stock exchange fees and spread costs are incurred. Spread refers to the trading margin between the buy and sell price. Asset managers cannot carry out netting in free assets because they have to transmit the orders to the bank individually for each client (in pillar 3a it is possible at best).
- finpension can split the management fee into a custody account fee and an asset management fee. In contrast to the flat fee charged by external asset managers, which includes both components, the custody account fee can be deducted in full from taxable income with finpension. As a rule, flat-rate fees from external asset managers are not tax-deductible because it is not possible to split deductible custody account fees and non-deductible asset management fees.
In contrast to banks, finpension can also play on the fact that the new investment solution does not jeopardise any existing business. Specifically, we mean the following: If an established bank launches a low-cost digital asset management solution, existing customer assets from expensive offerings can flow into the cheaper solution. This leads to a loss of turnover.
This cannot happen to finpension. finpension has no existing offering that could be cannibalised by the new investment solution. This allows finpension to concentrate even more on offering its customers real added value. finpension is clearly the most favourable provider of an integrated investment solution, as the following table clearly shows:
| Administration fee | Product costs of the funds (TER) | |
| Alpian | 0.75 % | not specified |
| Basellandschaftliche Kantonalbank (Digifolio) | 0.75 % | 0.20 – 0.35 % |
| Bank CIC (Clevercircles) | 0.25 – 0.65 % | not specified |
| Bank CIC (Cleverinvest) | 0.50 % | not specified |
| Postfinance (e-asset management) | 0.60 -0.75 % | not specified |
| Radicant | 0.50 – 0.90 % | 0.40 – 0.47 % |
| Raiffeisen (Rio) | 0.65 % | 0.30 – 0.60 % |
| Swissquote (Invest Easy) | 0.60 % | 0.14 – 0.21 % |
| Vontobel (Volt) | 0.80 – 0.96 % | 0.17 – 0.79 % |
| Liechtensteinische Landesbank (wiLLBe) | 0.49 % | not specified |
| finpension | 0.39 % | 0.08 – 0.10 %* |
Digital asset management: How do the offerings differ?
Robo-advisors can be divided into offers from external asset managers and those from banks.
Offers from external asset managers
Asset managers are referred to as “external” if the digital asset management is not carried out by the custodian bank itself, but by a more or less independent third-party company. In the banking world, the abbreviation “EVV” is also used for “external assetmanagers“.
External asset managers are:
- Descartes Finance
- Everon
- Findependent
- Finpact
- Inyova (as at 03/09/2024: not yet authorised as an asset manager).
- Investart (Rather not recommended. We used it ourselves as a test and had trouble getting the money back when we wanted to withdraw it).
- Kaspar& AG
- Selma Finance
- Simplewealth (Not found on the list of authorised asset managers / Certificate for encrypting data transmission had expired when we made this post).
- True Wealth (True Wealth holds a licence as a manager of collective assets. This enables it to offer asset management services to pension funds).
Asset managers require a licence from the Swiss Financial Market Supervisory Authority FINMA in order to operate their business. The application for authorisation had to be submitted to FINMA by the end of 2022 at the latest. By the beginning of 2024, FINMA had approved 70 percent of applications, which corresponds to more than 1,000 asset managers.
You may be surprised at the high number of asset managers and wonder why there are so many. Traditional asset management is a “people business”. Many very small asset managers only manage a few million, mostly from acquaintances. What’s more, the entry barrier to becoming an asset manager is comparatively low. It is therefore not surprising that the quality of services varies greatly.
Offers from banks (and investment firms)
In addition to external asset managers, banks have also introduced new investment solutions to the market that are more cost-effective than traditional asset management. As a customer of a bank, you have the advantage that both custody account management and asset management come from a single source. The easiest way to see this difference is at the end of the year, when you only receive one statement from a bank and not one from the bank and one from the asset manager.
Offers from established banks:
- Digifolio (Basellandschaftliche Kantonalbank)
- Clevercircles (Bank CIC)
- Cleverinvest (Bank CIC)
- E-asset management (Postfinance)
- Invest Easy (Swissquote)
- Rio (Raiffeisen)
- SaxoSelect (Saxo Bank)
- Volt (Vontobel)
- wiLLBe (Liechtensteinische Landesbank)
Offers from newly established banks / investment firms:
- Alpian (by REYL Group)
- finpension (is the only bank-independent provider with a higher licence)
- Radicant (by Basellandschaftliche Kantonalbank)
Neo-banks such as Neon (by Hypothekarbank Lenzburg), Yuh (by Postfinance and Swissquote) or Revolut have so far only offered trading solutions where you have to select the securities yourself. Neon recently expanded its offering to include a savings plan. Revolut even launched a robo-advisor, which is only available in Austria and Germany for the time being.
Why digital asset managers have so far fallen short of expectations
The first digital asset managers were launched a good ten years ago. Their aim was to revolutionise the Swiss market with simpler and cheaper offerings. So far with modest success.
According to statistics from the Swiss National Bank, the assets of Swiss private clients invested in securities totalled CHF 858 billion as at March 2024. In comparison, we estimate the assets that new digital asset managers have been able to acquire to date at less than two billion francs. This corresponds to a market share of less than 0.2 percent.
| New providers | Founded | Assets under management |
| True Wealth | 2013 | > CHF 1,000 million |
| Inyova | 2017 | > CHF 250 million |
| Selma | 2016 | > CHF 200 million |
| findpendent | 2019 | > CHF 100 million |
| other providers | … | (no figures published) |
There are other digital offerings that already manage more than a billion or at least a few hundred million in assets. However, these are offerings from established players such as Raiffeisen (Raiffeisen Rio), Postfinance (e-asset management) or Swissquote (Invest Easy).
New offerings from established players have a much easier time by nature. They reach a certain volume more quickly by shifting funds from existing customers. The disadvantage is obvious. Existing products with significantly higher fees have to accept internal outflows. In this context, there is also talk of “cannibalisation”.
What are the reasons?
Why is it that independent digital wealth managers have not yet been able to grow in line with their expectations? True Wealth, for example, had hoped to reach one billion in assets under management and thus break even as early as 2017. In the end, it took six years longer to achieve this goal. All other providers are unlikely to have reached the break-even point yet and are dependent on further capital injections.
Digital solutions would actually be significantly cheaper and much more transparent than conventional asset management. You could be forgiven for thinking that the money would just fly to them.
It is difficult to explain this phenomenon. Assuming that Mr and Mrs Swiss could save half a percent in costs every year with a digital solution, savings of several billion francs would already be possible. Annually, of course.
So it seems that low and transparent fees alone are not enough to convince wealthy customers to opt for a digital solution. What else is needed?
Lower entry hurdle also no guarantee of success
In addition to low and transparent fees, digital asset managers are characterised in particular by low minimum amounts. Whereas traditional asset management companies are only accessible from CHF 100,000 or a multiple thereof, you can invest money with digital providers from just a few hundred or thousand francs.
The real problem here, however, is that although asset managers are expanding their target group, they are still unable to reach wealthy private individuals. This is because people with assets of less than CHF 100,000 only own three percent of assets in Switzerland. So by lowering the barrier to entry, digital asset managers are tapping into an additional market of just three percent. That’s not exactly exhilarating.
People with assets of 200,000 to 2 million would be more interesting. On the one hand, these households are relatively numerous. On the other hand, they account for around 36 percent of wealth in Switzerland, as the following chart shows.
Simple online opening is all well and good, but not enough
Another difference between digital asset managers is that it is much easier to open an account, which is done entirely online. But even this does not seem to lead to resounding success.
We assume that many people see no disadvantage in having to take time for a personal consultation. Whether this is on site with the customer advisor or in an online meeting. On the contrary, such a dialogue presumably gives them the necessary confidence that they are in the right hands. A study by the Lucerne University of Applied Sciences and Arts comes to a similar conclusion, which sees the future in a hybrid model (combination of digital solution and personal advice).
In our view, this is where asset management clearly differs from a payment app. For a payment app such as Neon, Yuh or Zak, simple onboarding is likely to be much more important than for asset management.
This is not to say that simple onboarding does not help, but it is and will not be a sure-fire success.
It may also be a generational issue
A large proportion of wealth in Switzerland belongs to people who are already of retirement age, as the next chart shows. It is therefore quite possible that this is also a generational issue. It is also possible that future generations will be more critical of non-transparent offers with hidden fees.
Apart from that, however, we should not expect customers’ needs to change fundamentally. When it comes to investing one’s own, possibly hard-earned assets, trust will continue to be decisive in the future.
In connection with the statistics mentioned, it is also interesting to note that the increase in wealth occurs particularly between the ages of 50 and 70. This is precisely the time when retirement also plays a major role.
In contrast to digital asset managers, who primarily court young, less wealthy customers, another provider has perfectly targeted the 50+ age group: VZ Vermögenszentrum. The wealth centre’s business model is relatively simple. VZ offers pension planning, thereby gaining the trust of potential clients and generating many interesting asset management mandates along the way. Assets under management at the wealth centre already amounted to CHF 44.9 billion at the end of 2023 (not broken down into pension assets and non-linked assets). We think that digital providers can learn a thing or two from the wealth centre.
There are alternatives to asset management
Finally, it is important to remember that investors are not reliant on a digital asset manager. It is possible to buy the funds yourself and invest via an online broker.
People who have some experience with investments and compare offers online do not automatically end up with a digital asset manager. Some of this group will buy the investments themselves via an online broker such as Swissquote, Postfinance, Saxo Bank, DEGIRO or Interactive Brokers and – if they do it right – will even save a little more money.
One pitfall when investing via online brokers is the fees for foreign currency exchange. In some cases, custody account fees are kept very low, but at the same time high exchange costs are incurred when exchanging money into a foreign currency. At Swissquote, for example, a foreign currency exchange costs as little as 0.95 percent, which is significantly more than with digital asset managers (finpension 0.0 percent, True Wealth 0.1 percent, findependent 0.5 percent).
The investment solution from finpension sets new standards
So far, robo-advisors – as digital asset managers are also known – have fallen short of expectations. Nevertheless, finpension has developed a digital investment solution and successfully launched it in mid-May 2024. Why?
The answer is relatively simple. We weren’t completely convinced by the previous offerings either. That’s why we looked for a way to take digital asset management to another level. Judge for yourself whether we have succeeded.
Our goals are to be better than
- Established banks: Established banks still charge far too much for asset management, even for their digital solutions. This can be done much more cheaply, as the offers from finpension and the best non-bank asset managers show (see table below).
- Non-bank asset managers: With finpension, you get more for your money than with non-bank asset managers. Above all, the fact that finpension provides custody account management and asset management from a single source makes finpension’s investment solution – with similarly high fees – more valuable.
- Online brokers: With the new flat-rate tax credit for withholding tax on US dividends, digital asset management will also become interesting for people who have previously invested their money themselves using a do-it-yourself solution via an online broker (subject to authorisation from the tax authorities).
Important: finpension does not see itself as a purely digital provider. Advice for companies and insured persons is already a very important part of our service, particularly in the extra-mandatory pension provision 1e market. But we are also happy to take the time to answer your questions personally about other products. We will be happy to assist you, whether via chat, on the phone or in a specially arranged video call.
In this sense, we do not see digitalisation as a substitute for customer contact. Digitalisation makes processes simpler. This automatically leads to better service quality and risk control. However, customers can and want to be able to do many things themselves today without always having to ask. This must be just as possible as personalised support.
Security for digital asset management
Last but not least, we would like to highlight the issue of bankruptcy risk. We have so far left this topic aside because it is of secondary importance for an investment solution that is invested in securities.
As your money is usually invested with an asset manager in funds (without counterparty risk), it is not part of the bank’s balance sheet. In the event of bankruptcy, it is therefore not part of the bankruptcy estate. Only the portion held in cash is affected by the custodian bank’s bankruptcy risk. Up to CHF 100,000 of the deposits in cash are also protected by the depositor protection scheme. The portion held in cash is often significantly lower.
Important: In the case of investments with counterparty risk (e.g. tracker certificates or structured products), this statement is not correct. Your investment is at risk if the counterparty goes bankrupt.
As a securities firm, finpension functions like a bank in this respect. Balances held with finpension are protected by the depositor guarantee scheme. finpension also only uses investments that do not involve any counterparty risk.
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