Finpact: digital wealth management for Generation 50+

Investing / Brokers
1

Came across this:

It’s a digital wealth management app/robo-advisor, but with a twist: the target group is pre-retirement folks, they call it Generation 50+. Make sense, because challenges are different than for digital natives/millennials/Generation X in their (early) accumulation stage, which are overrepresented in this forum.

The starting fee of 0.65% is completely unmustachian, of course, but the content is interesting. From the first look, it has many articles about the basics of investing, about Swiss retirement specifics and presents some typical portfolios for different situations.

I see some use cases even for typical forum members:

  • A possible answer to a question “My (older relative | colleague) asks me to help with investments, what should I do?”
  • A way to justify your investment activity to someone not in Personal Finance crowd. Information from the website of a Swiss FINMA-regulated assets manager is more trustworthy than the same information from the website of an American financial blogger, right?
  • Same as the previous point but with respect to portfolio construction. What is the role of different assets in the portfolio, what is all-weather portfolio, index investing, etc.

Hope someone will find it useful.

P.S. Looks like the whole website is in German only :person_shrugging:.

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2

These are things super useful to recommend people not as into the stuff as we are and never will.
Like someone‘s friends parents would ask me what to do, as they heard I‘m good with finance. I would recommend stuff like this, as I can‘t play advisor for them and a proper advisor/wealth management can cost you 1+% AUM fee.

Is there some overview of example portfolios they construct?

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3

So it‘s 0.65% per year + TER of the funds?

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4

Yes, there are some examples at the bottom of the page at “Geldanlage”. There are strategies and some also has different risk tolerance levels. With pies etc.

The information is not as detailed as you as a seasoned investor would like to see, but I think (and I hope) it is on purpose not to overwhelm the customers. For example https://finpact.ch/wp-content/uploads/2024/05/Finpact_Index-Portfolio_30.04.2024.pdf

But the basics seems to be covered well at the level that is needed.

P.S.: For example I have found an argument for the withdrawal of 2nd pillar that I have not thought myself. In this case you pay reduced tax once, but all pension payments are taxed as a regular income.

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5

40% bonds, 56% stocks, not that bad to be honest. The bit I have more issue with is the (simulated) performance, for such a big chunk of bonds and Swiss stocks it doesn’t seem to shield against big volatility. Won’t ever be interested in such a thing anyway, but good to be informed!

6

It definitely sounds interesting.

I know older folks who spent much more money with VZ as an example.
Question is whether this “new/online” approach resonates with the target audience. They do have also in-person advise, but it’s not prominently advertised.
The in-person advice was crucial for those people I know as they would not have trusted any online-only solution.

Question is whether someone who digs deeper into the details finds red flags; if not I would also be happy to suggest this to others. To be honest, maybe even for very close relatives, as I weight the personal relationship higher than helping them save some money with a custom-made solution. If I would propose them a custom solution and it loses money, I would be the bad guy; even if the same would have happened when using finpact etc.

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7

Hear, hear!

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8

I always say to friends that i am not a financial advisor, but i can tell what i do myself and why, and that they don’t need to copy me.

I don’t know why one should pay 0,65% for a roboadvisor. Our expensive banks provide managed portfolios with certain risk levels at a somewhat cheaper cost.

9

Doesnt seem to be a normal roboadvisor, does it? At least at the other Roboadvisors you can’t get a in-person meeting with someone (Selma, usw.) to discuss your plans.

I don’t need/want it for myself. But I see the added value.

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10

As @almi mentioned, it’s more than a roboadvisor. But then again, I agree with you. Banks offer the same service for the (sometimes cheaper) price and have already long-standing relationships and people trust them. Just take Cantonal Banks: Banking, Savings Account, Retirement Planning, Freizuegikeitsstiftung, Third Pillar, Funds, and the list goes on.

Here is an example of SZKB: https://www.szkb.ch/docs/default-source/private---manuell/themenblatt-kernmandat-index.pdf

0.70% fee, just 5bps above Finpact

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The TER of the fund is not included. Faire Gebühren - Geldanlage von Finpact.

For exemple, VZ is cheaper and you get real meetings. (0.55% + ETF TER).

If someone asked me for a monthly investment solution, I would recommend Finpension, unless they have millions or would like to do a big one time investment.

12

Do you have proof of that?
A collegue recently showed me a quarterly reporting of his “Vermögensverwaltung mit Indexanlagen” and it’s 0.55% annual fee “Pauschale Verwaltungsgebühr VZ” PLUS 0.7% annual fee “Dienstleistungsgebühr VZ”, so 1.25% p.a. in total.
ETF TER is not mentionned.

13

That‘s their full service with advisory etc.

There is the smaller package with the 0.55%.

But that for example does not include an automated payout function etc. I think. So it would not be a direct equivalent to the finpact service.

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14

You can get advisory contracts with private bank wealth managers for 0.4-0.6% per year (like myself :stuck_out_tongue: )

15

I imagine you need quite some aum for that?

And what are the final product costs then?

16

Yeah usually we‘re talking about at least 1 million in bankable assets.

Most clients have single stock portfolios (usually with a high CH home bias allocation), so only trading fees.

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