Digital asset management is becoming increasingly popular

But what is behind this form of investment and how does it work?

How does digital asset management differ from the traditional asset management of Swiss banks and how does it distinguish itself from robo advisors? What do investment apps cost and who needs digital asset management? Find out in this blog post.

What is digital asset management?

Digital asset management offers investment and ongoing management of your savings. In most cases, this service is fully digital and available online via desktop and/or smartphone app.

Digital asset managers usually offer an investment app with which you can manage your investments conveniently via your smartphone. This means you are independent of time and place. Whether via mobile app or online via desktop computer, digital asset managers take care of your investment electronically.

What do digital asset managers do?

Just like traditional asset managers, digital asset managers are responsible for investing your savings. With the help of a questionnaire, they determine your risk capacity and risk appetite and recommend a suitable investment strategy based on this. You can accept or override this investment strategy and select a strategy yourself or even compile a portfolio independently.

Very often, passive investment instruments, so-called ETFs, are used in digital asset management to create the portfolio. ETF stands for Exchange Traded Fund. They usually replicate a stock or bond index and are cost-effective ways of representing the entire financial market with a single investment. Either of a country, a region, an industry or even the entire world.

The opposite of cheap passive ETFs are expensive actively managed funds. Here, an entire team of portfolio managers usually has to be financed. These managers are supposed to provide added value compared to the benchmark index, a so-called outperformance. That is why such active funds are 5 to 10 times more expensive than passive ETFs. But this increased price does not pay off in the majority of cases. The independent rating agency Morningstar recently found out that over a 10-year horizon 97 out of 100 active funds fail to generate added value. Instead of outperformance, the bottom line, after deduction of costs, is often underperformance, a lower return.

When and who needs a digital asset manager or investment app?

You need an investment app for a cheap and easy way to start investing. If you decide to invest your savings in shares, bonds and other securities, an investment app is often the best choice. It’s simple and you don’t need any prior knowledge. What’s more, you can start investing for as little as a few hundred francs. With classic asset management mandates, the entry threshold is often several tens of thousands or even hundreds of thousands of francs.

But digital asset managers and investment apps are also ideal for reallocating existing fund units or asset management mandates. Here, the fee advantage has a much more massive effect due to the higher investment sum (investment basis) calculated in francs.

Who is the best digital asset manager?

Creating a classic ranking of the best digital asset managers is impossible. The reasons for this are, on the one hand, the different allocations between the various investment instruments. Not all digital asset managers have exactly the same equity quota. Sometimes there are 45% equities in a balanced portfolio, sometimes 50% or 55%. Sometimes there are real estate funds in the portfolio, sometimes not. On the other hand, not all asset managers make the historical returns of their investment solutions transparent. If they do, it is not always clear which costs still have to be included to arrive at the comparable net return.

However, a good comparative indicator is the management fee, which is calculated as a percentage of the invested capital.

How much does digital asset management cost?

Digital asset management should cost around 0.50%. Anything in the direction of 1% and even higher is clearly too expensive a solution. The costs of asset management are made up of the custody account fees and the costs of administration. In addition, there are the costs of the investment instruments used (product costs). Here you should make sure that so-called ETFs are used where possible and sensible. The fees for ETFs are called TER (Total Expense Ratio). In most cases they should not exceed 0.20%.

Our fee calculator helps you keep track of all the costs for your findependent investment solution:

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Who has the cheapest investment app to invest money?

According to a study by the independent comparison platform Moneyland, the findependent investment app offers the cheapest solution on the market for digital asset managers in Switzerland at 0.44%. What’s more, with findependent you benefit from free investment for the first 2’000 francs – for life!

Moneyland took a close look at the costs of digital asset management and found that investment apps are significantly cheaper than traditional asset managers. It turned out that the investment app from findependent is the cheapest solution in Switzerland. The entire study is available here.

Is a robo-advisor a digital asset manager?

Not every digital asset manager is a robo-advisor. But every robo-advisor is a digital asset manager or offers online asset management.

There are digital asset managers that are not fully automated like a robo-advisor, but either offer a hybrid version or even exclusively handle client acquisition, onboarding and determining the investment strategy online. The actual asset management, however, is then no longer digitised.

Digital asset management and investment app – how useful?

An investment app makes sense if you don’t want to deal with investments every day and prefer to use your time elsewhere. The digital asset manager takes care of the ongoing risk monitoring for you and provides you with a ready-to-use tax statement at the beginning of each year (this should, by the way, already be included in the fees and not be charged separately, which is another way to recognise a good investment app). If you are interested in the development of your investment in the meantime, you can conveniently open your investment app and see all the details of your investment solution at a glance.

If you would like to calculate for yourself how your savings will develop if you use the findependent investment app, then try out our yield calculator.

Experience with digital asset managers and investment apps

We have collected some of the voices of our users for you:

  • “I am happy to have found good care through findependent. I immediately recommended findependent to others.”
  • “You guys are doing a great job. All the touchpoints I’ve had so far have always been flawless and helpful. You definitely have to keep that up, even if it will be a challenge with constant growth. You always know exactly what is happening and what the next step is. The customer support and your mail were also helpful. Compliments to you and your team. Keep it up!”
  • “The first company where “saving” is made easy – especially with the app! Keep it up!”

This shows that the users are satisfied and also appreciate being able to actively participate in the further development of our investment app.

In addition, users of the findependent investment app double their initial deposit within the first 6 months. This is also an indication of the existing trust.

Good reasons for a digital asset management

So there are several good reasons for an investment app, a digital asset manager or whatever the solution is called.

  • Simple handling
  • Available at any time, independent of time and place
  • No previous knowledge necessary
  • Low entry amount
  • Low fees

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