Robo Advisor Switzerland

It’s that simple!

Executive summary

Robo Advisors make it possible to invest in shares and other securities without prior knowledge of the stock market and at low cost. The demand for such all-in-one solutions is also increasing in Switzerland. This article looks at how robo advisors work as well as the various possibilities of robo advisors in Switzerland. It also answers the question for whom Robo Advisors make sense.

Here you can navigate to the following questions:

Robo advisor definition: what are robo advisors?

The word Robo Advisor is composed of the two English words “robot” and “advisor”. In reality, it is neither a robot nor an advisor. A robo advisor is an asset manager that invests money for investors, mostly in an automated way. These algorithm-based systems ensure that investors’ portfolios remain optimised according to their risk profiles.

Furthermore, with the help of a robo advisor, investors already invest with a low starting capital. They often invest passively in ETFs. ETFs are exchange-traded funds (ETFs). They offer the advantages of investing cheaply and in a broadly diversified manner, even with low initial capital.

What does a robo advisor cost in Switzerland?

An important aspect of robo advisors is that the costs for investors are kept low. This is possible because robo advisors charge significant lower management fees and rarely charge peformance fees (traditional asset management do charge in certain cases). Passive investing in index funds makes the services of an expensive flesh-and-blood asset manager superfluous.

So how much does a robo advisor cost? This question is not quite easy to answer, as it varies depending on the provider. Most charge an annual flat fee of between 0.4% and 1.5% of the investment amount. At findependent, the annual flat fee of 0.44% is in the lower range.

Furthermore, most providers add product costs. If a robo advisor invests in ETFs, these product costs are the so-called TER (Total Expense Ratio), which represent the ongoing costs of the individual ETFs. In addition to the product costs, there are also trading costs and stamp duties. It is therefore advisable for investors to always keep an eye out for these costs.

Moneyland, the independent comparison portal, recently found out that investment apps are significantly cheaper than traditional asset managers. Click here for the entire study.

We’ve also published a comparison of investment apps in Switzerland with pros and cons for every provider.

Are robo advisors useful?

Robo advisors in Switzerland have the advantage that they are cheaper than traditional asset management mandates. The algorithm-based system, which invests money automatically, saves costs that go to the asset managers in traditional asset management. Investors benefit from this.

On the other hand, automated investing saves investors time and nerves. After all, no one can predict with certainty how the stock market will behave in the coming days or months. Those who nevertheless try to do so should intensively deal with the ups and downs of the stock market on a daily basis. Ambitious investors try to identify those shares that will rise in value in the future. This method requires not only a lot of time, but also a lot of nerve and stamina to stick to one’s investment strategy during a lean period and not to react emotionally.

A robo advisor provides you, the investor, with a digital service that quickly tells you which investment strategy is best based on your risk and budget. The beauty of robo advisory is that the robo advisor does all the work for you while you sit back and relax without having to follow the daily share prices.

What are the benefits of a robo advisor?

A robo advisor comes at low costs, is convenient and easy to use. Those who use the services of a robo advisor are, on balance, significantly better off than with traditional investment advice. This is possible because the robo advisor is an optimised and automated process. As completely digital software, robo advisors enable low costs, which are then passed on to the client as a result of low fees. In addition, no performance fees are often charged for digital management and advice, as is the case with traditional asset management.

In addition, the minimum investment amount for robo advisors in Switzerland is significantly lower than for traditional asset management mandates. Investors can invest as little as 500 Swiss francs with findependent.

Ultimately, managing one’s own capital investments on one’s own requires a lot of time and not infrequently almost professional stock market knowledge. Automated asset management makes it possible to invest according to one’s own risk profile with minimal effort and without damaging one’s nerves.

The findependent solution

Are you looking for a robo advisor in Switzerland? Findependent offers you the best investment app. From as little as 500 Swiss francs, you can invest money easily and without prior knowledge. The different investment strategies, which are tailored to you, are also suitable for beginners and make investing money in Switzerland possible at fair fees. With findependent you even invest your first 2,000 Swiss francs for life without administration and custody fees.

As is typical for a robo advisor, an investment solution is determined at the beginning when you open your account based on your risk tolerance. You can simply fill out a digital questionnaire and automatically receive an investment proposal. It is up to you whether you want to accept the proposal or choose a different investment solution. Findependent offers four different ready-made investment solutions: Cautious, balanced, brave and risky. The investment solutions differ according to the investment type of allocation between shares, bonds and real estate. Shares have a promising prospect of high returns, but they are also subject to volatility. Since shares are considered rather risky, the proportion of shares is correspondingly higher for risk-loving investors than for conservative investors. The higher the proportion of shares, the higher the expected return and the longer the required investment period.

As befits a digital investment solution, findependent takes over the management of your assets for you. Rebalancing, i.e. the automated rebalancing of the weighting of the individual securities, is carried out via an algorithm-based system. Every time you make a new deposit, your money is invested so that the weighting of the individual ETFs is always perfectly in line with your chosen investment solution. By setting up a standing order each month or quarter, your money is automatically invested without you having to follow what is happening on the stock market on a daily basis.

Conclusion on robo advisors in Switzerland

Robo advisors are digital asset managers who invest the investors’ money automatically. The central aspect of a robo advisor is the very low management fees in comparison to traditional, human asset managers. Robo advisors are a good all-in-one solution for investors who do not want to constantly follow what is happening on the stock market. Another significant advantage of a robo advisor is that it works out an individual investment strategy for the investor. This is based on the respective risk profile. Digital investment tools such as findependent help to save and invest easy, cost-effectively and recurring.

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