TrueWealth what do you think?

Hi

I just took a closer look to www.truewealth.ch a robo advisor from the guy that co-invented digitec. i already looked at it some months ago but decided 0.5% plus etf fees naa not mustachian. but now i am not so sure anymore. as i am with postfinance i pay 90.- per year and i get these 90.- as trading coins so my first 90.- for buying etf is already free. at truewealth you dont pay depot fees buying spreads, exchange rate fees, transaction fees (only the federal stamp tax) and so on.

my calculus goes like this. as i have my save haven porfolio part now in cash (due to negative interest rate on AAA swiss govbonds and the risk of rising interestrate) i would have to invest in the truewealth portfolio only my risky assets (about 50%)

so in fact you would also pay 90.- at truewealth for 18’000.- worth of risky assets. (total portfolio would be 36’000). so for small porfolios with e good amount of cash in a seperatr account truewealth is cheap.

but then there are even more good points to consider.

  • truewealth delivers porfolio overview wirhout you have to start your own excel and you get a tax document with all necessary information for your tax form.
  • also i was astonished that etf costs are much lower than the ones you find at justetf.ch and others (in the demodepot you do not see which etf you exactly would buy) this is because Trueweath also buys US based etf.
  • they say they are even capable of getting back allmost all taxes on the products. so it would be very taxefficient without bothering you with it.
  • they rebalance every few days
  • there is s vast amout of ways you can create your portfolio. equities for mcap or regions an even countrielevel (china, SA etc.) for the US and europe you can even decide sector engagement. broad comodities, gold and silver. Real estate US or non-US, in the bond section you also have alot of choice. (countries, government or corporate, all kind of ratings and durations, inflation linker, etc.)

I was just getting comfortable with the idea that with my porfolio i will stick to a simple FTSE All-World, Global REIT, and cash way of investing due to minimise transaction and rebalancing costs and now this…:slight_smile: even if you have s quite large and maybe detailed porfolio it might be a cheap way of investing.

so does anyone has experience with truewealth or additional questions informations and what is your opinion?

p.s. they work with saxo-bank which is ok i think

basilisk

I had subscribed on the website but I never sent back the signed document after I received them.

Basically you allow them any kind of risk inversement in your name.
I discussed this with them and they said it was due to saxobank not having a more specific document.

Still I did not think this small risk was compensanted by their advantages.

Thanks mondopiccolo

Hmm you hit a point there. What bothered me was also the fact that i don’t know in which product i am invested until i am invested. with VZ for example you know what ETF or Funds you can buy and look them up if they suit you (is it the right index, replication, and so on). i also red now, that due to the fact that they also use US based ETF it might has some regulatory boomerangs for example if the owner dies tax issues arise. that and your point open up a broad field of unexpected (regulatory) risks related to truewealth. And as trustworthieness is key if you don’t want to do all by yourself this might be a major issue. But do you think this is solely a Problem with TW or with any robo advisor in switzerland?

Hi Basilisk,

I have a portfolio there as I was curious about the 1st CH robo advisor, I think I might have been one of their first clients :sunglasses: Here’s why:

  • The philosophy and UI/UE resonated with me and the transaction costs of trying it out were low enough to give it a shot. Saxo as custodian is fine, your money is Sondervermögen/special funds= not incuded in bankrupcy estate, so all good, also, I have well below the 100k there, above 100k it can be different.
  • Product costs are low, impressive 0.15 percent TER for my current portfolio (plus their 0.5% of course)…
  • They enable a flexible individual ‘Sparplan’ (monthly transfer in my case, but you can just transfer and also take out any amount any time free of charge. They’ll allocate it according to your ‘asset mix’.

Some things to consider:

  • It’s all in CHF, no other currency possible (cf Postfinance EUR and USD, cf IB 20+ currencies) and so are our Pillars 1,2,3 - as I don’t know how long I (or you) will stay in Switz, this could be a minus. I never checked if I can keep it once I leave. I had to prove I’m a resident upon opening the account.
  • They suggest a ‘mix’ of cash/bonds/stocks/REIT/commodities and let you override it to an extent. I locked commodities at 0% as they don’t offer ex agriculture afak and that’s s/th that I’m not comfortable with. However, I played with it after reading your post and they wouldn’t let me set bonds to 0%. 15% is the minimum they’d “allow” me to decrease it to. Not sure if this has to do with the risk questionnaire I filled out (and which you can fill out again with different data anytime) but this is important for you since you’re thinking about going all stocks/REIT.
  • They pride themselves of providing you with a balanced (and self-(re)balancing) portfolio, but they don’t commit to any rebalancing intervals - certainly not the few days you mention above.

I quote from their FAQ: “How often will you adjust my portfolio? To deal with deposits and withdrawals, your portfolio is adjusted as soon as possible, although this also depends on external factors, such as stock market holidays. Otherwise, the most efficient method is to readapt your portfolio to the asset mix as soon as its current composition differs from this mix by a specified amount. Fixed intervals (e.g., monthly or quarterly adjustments), by contrast, tend to entail higher costs. For this reason, we continuously monitor your portfolio and adapt it to the requested asset mix whenever necessary. We cannot provide any advance information about the timings, as they are influenced by the performance of the individual asset classes.”

Let me know if you’re interested in screenshots or the FAQ (not sure they’re accessible if you’re not logged in)
… or in anything I should check out for you from the inside :sunglasses:
Mie

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Truewealth can be good for small investments which are done each month.
However, I find this platform not transparent enough. You don’t know in which ETFs your money is invested, you don’t know how taxes are managed.

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Which ETF: While you don’t know it in advance, you can see it once the funds have been invested.

To me (i did not check it out) it looks like the best available solution for people that really dont want to dig deep into personal finances, which i believe is the majority (ofc not in this forum^^)
As soon as you invest your personal time into this matter, you most probably design your own ETF portfolio. The only point where i see a potential plus is the tax reclaiming, IF we can find out what exactly it is.

Yeah sorry Mie. I wasn’t very accurate reading the rebalancing theme :). To me the issue of not knowing where i invest in exactly (in advance) is somewhat unpleasing.

Yesterday VZ also updated its investmentlist not only for pillar 3a but also for the ordinary robo-advisor (its the same list). And i must say i much more prefer their approach where they give you some choice in product. its not a huge list but as nugget said for someone who is (a little bit) interested in financial matters it makes a difference. Even TrueWealth points this out on their Q&A that they might not be the best solution for self-decision:
“Kann ich andere ETFs verwenden als von ihnen vorgeschlagen?
Wir wählen jedes unserer verwendeten Anlageinstrumente sorgfältig aus, weil wir glauben, dass es das beste Instrument ist, um in die entsprechende Anlageklasse zu investieren. Wir bieten eine Vermögensverwaltungs-Dienstleistung an, die versucht, Ihren Anlagebedürfnissen ganzheitlich zu entsprechen und sind deswegen vielleicht nicht immer für Selbstentscheider die richtige Lösung.”

As i have my 3a Pillar now at VZ and their ordinary robo-advisor costs 0.55% similar to TW (0.50%) i will have some rethinking naps over this. For now they both seem to be a good choice for me until my assets reach a level where 0.5 / 0.55% will be no good deal for an all-in-fee solution anymore.

wow, here is a detail: My VZ fee is 0.68% all-in. what exactly is your 0.55%? how did you get it or to what exact product is it linked?

0.68 % is for VZ 3a pillar with ETFs
0.55% is for VZ robo-advisor with ETFs

I don’t really understand why the same service is more expensive with 3a pillar

Ok i wasn’t accurate again. the list 3a and robo advisor is not exactly the same they use some different etf/indexfunds for the same category. i dont know why must be something to match some regulatory hurdles ?!? i think they want 0.13% more because there is no real competition in 3a market. :frowning:

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+1 on this…:unamused:

@basilisk
could you provide a link to aPDF that specifies the 0.55%? I just wasnt able to find it online :confused:
thanks!

https://finanzportal.vermoegenszentrum.ch/anlegen-uebersicht/sparen/faq.html?lang=fr

A combien se montent les frais et que comprennent-ils ?
Les frais annuels s’élèvent à 0,55 % de la fortune investie (au minimum CHF 20.- par trimestre). Il s’agit de frais forfaitaires (« all-in fee »). Ceux-ci rémunèrent l’ensemble des prestations comme la gestion du compte et du dépôt, les transactions, les rapports, la sélection et le suivi des fonds, etc.

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I do own a TrueWealth account and I am pretty happy sofar. I used to have a test account for more then two years and finally created a non virtual account :). I can’t find anything about it on the forums but they have put out an affiliate programm where they cut the administrative fees by 50% (form 0.5% to 0.25%) for the owner of a Truewealth account and the person who uses the link for one year. This porcess can be repeted for ten more friends/years.
If some one is interessted in a affiliate link, please send me a PM.

You basically joined 2 minutes ago to post your affilate link.
@Bojack @Julianek what do you think?

Same as for the VIAC referal thread.
If we start allowing people without any contribution to the forum to start posting their affiliate links, it will soon become a big mess, as the VIAC referal thread proved in the past.

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Hi Glina

You are right, this is due to me only finding this Blog a week ago. I try to participate more. As stated I haven’t found any other links for truewealth on this forum so I tought it was okay.

Hei

I already replied to a similar thread about truewealth. I am going to copy-paste my answer to share my experience:

Let me chip-in. I started investing for the first time ~2 years ago and after evaluating many options I >decided for TW. Through research I knew that IB and other options were cheaper after reaching a >certain amount of money invested ([there’s actually a good post in this same website ]>(https://www.mustachianpost.com/2018/07/27/best-online-brokers-for-swiss-mustachian-investors-in-2018/)), but for me personally TW had a lot of advantages:

  • IB is cheaper only if you are ready to lump-sum invest large amounts. With TW you can use dollar->cost-averaging and the fees are included in the 0.5%. Since I wanted DCA for the peace of mind it >gives me (I know that lump-sum is actually better, but it was my first time investing and with DCA I feel more confident in case of a big crisis). With TW I can DCA relative small amounts without paying exorbiting fees.
  • At the time I wasn’t sure if I was ever goint to pass the threshold were IB and other brokers are cheaper than TW, and even if it was, it wouldn’t have been for some years.
  • TW gave me the confidence also regarding taxes. I had never invested and had no idea how to file taxes, and no one to ask for (without paying). With TW I get a document and instructions for how to file my taxes.
  • The company made me a great impression. Before investing I have sent an email called “2 questions about investment start and fees”; it ended up being a 50+ email conversation about all the questions I had. The support was amazing in answering all my questions, and it continued even after I invested with them. The guy from support even invited me to grab a coffee, and I was only investing the minimum to join them, I am not a big fish or anything like that.
  • If you want you can create your own portfolio (it’s what I did), I asked them a list of their ETFs and picked the ones I wanted in their app. My total cost is 0.61% if I am not wrong. In my personal opinion ok for my situation described above.

TW definitively helped me pull the trigger on investing for the first time by giving a lot of confidence. I can not recomend it enough if you are in a similar situation. If you are a seasoned investor with relatively high amounts to invest, ready to lump-sum it, then go with IB or other brokers. If you’re relatively new, want to DCA and/or in general don’t plan to invest that much, then TW is a good alternative, at least for starting out.

p.s. if anyone is interested write me for the referral, someone already mentioned it, it’s 50% off on 1 year of fees, so only 0.25% + your TER.

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That large sum is around 24’000 chf.
Also don’t underestimate the 2% cash holding, every percent that is not invested has an opportunity cost of around 0.05% per year. So for a 50’000 chf portfolio the cost of TW would be 250 chf(or 300 chf if you include opportunity cost) and for IB it would be 120 chf (maybe 125 with your cash holdings) for the inactivity fee.

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