Why All-In-One Financial Apps Are Costing You Money

All-In-One apps

Traditional banks have always tried to do almost everything. For instance, a traditional Swiss bank would usually have at least these services:

• A bank account
• A third pillar account
• A vested benefits account
• A broker account
• Mortgages

However, traditional banks were never the best at most of the services, except for bank accounts. They are mostly capitalizing on their existing customers using more services from them without comparing.

And recently, digital banks have been trying to do exactly that by pushing as many financial services into a single app. Some digital banks are even openly saying they want to be an all-in-one app.

On paper, this sounds great. You only get one service to deal with, and you get all the best services in the same place.

But there are issues with that.

1. The main issue is that no single financial service can do everything well. If you want a great financial toolbox, you will need to use multiple services.
2. The second issue is that these services capitalize on existing users to use some further subpar services. Many people will simply trust new products by the financial services they are already using.
3. Another small issue is that having all services in the same place makes it more difficult to move.

This means that by using an all-in-one financial service, we are using an unoptimized set of services.

We can take some examples to see exactly how it works in practice.

Banking features

Best Digital Bank

Alpian

4.5

Alpian is a premium digital bank, aiming to help affluent people with their money without paying the outrageous costs of traditional private banks.

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Banking is where all-in-one apps are starting. And this is honestly where they perform best. We can take a few examples of all-in-one apps to see what they do well.

Alpian does many things, but in essence, it is first a premium bank account. The bank account is free and has excellent currency exchange fees (0.20%). It does not have free withdrawals in Switzerland or abroad. It is a very well-rounded bank account, and it is my favorite for paying abroad.

Neon is another great example. It is a mature digital bank account. The bank account itself is free. The currency exchange fee is good (0.75%), and it can be reduced with some monthly subscriptions. By default, there are no free withdrawals either, but you can get some if you opt for a premium tier.

Yuh is explicit about wanting to be an all-in-one app. The bank account itself is free, and you get one free withdrawal per week in Switzerland. The downside of this app is that currency conversion costs 0.95%, which is above average for digital bank accounts.

Zak is also a nice banking package. They have no management fees either. You can withdraw money for free at all Bank Cler ATMs, but all other withdrawals will cost 2 CHF. The exchange rate itself has a surcharge of about 2.50% when using the card. Therefore, using the card abroad is expensive. So, Zak is a good banking package for Switzerland, but not so great when we cross the border (foreign currencies online also count).

Overall, banking is where the all-in-one apps usually shine. They are doing well and offering a solid bank account. This makes sense because this is where people start, and then people start using other internal services over time.

Investing features

Best Swiss Broker

Saxo Bank

4.5

Extremely affordable

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Pros:

• Low currency conversion fee
• Swiss broker

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The offer is only valid for Swiss residents and the credits only valid for 90 days.

All-in-one apps also offer some investing features. It is not always easy to compare them since they are often quite different. But we will start with broker-like features. And we can compare with Saxo, an excellent Swiss broker. It offers access to most ETFs and stocks in the world without any custody fees. These services have great fees.

Neon is interesting in that it offers access only to the BX stock exchange, where everything is priced in CHF. This means there are no currency conversion fees. On the other hand, this means no access to US ETFs. Neon can be cheaper than Saxo for small transactions on Swiss ETFs. But Neon is more expensive than Saxo for large transactions on Swiss ETFs and all transactions on foreign ETFs.

In comparison, Yuh is generally cheaper than Saxo on Swiss ETFs (unless you trade large amounts), but it is more expensive for foreign ETFs. The currency exchange fee is also almost four times more expensive than Saxo, which weighs a lot in the balance. Fortunately, Yuh does not have any custody fee. However, it does not offer access to US ETFs, meaning you suffer from dividend leakage because of unrecoverable withholding taxes.

Zak is priced quite differently than other apps. They are charging a 0.27% custody fee without a maximum. This means that as your money grows, you will pay more fees. The currency conversion fee is not shared by Zak, but we can expect some hidden fees. They have good fees for Swiss ETFs but pretty expensive fees for foreign ETFs.

For reference, here are their fees compared using my broker comparison tool for a fortune of 100,000 CHF and a monthly investment of 1000 CHF.

Finally, Alpian is different since it does not offer brokerage services but rather something like a premium robo-advisor service. And like a premium service, it is costly, with a total fee of about 1%. This makes it about twice as expensive as other robo-advisors.

Overall, these all-in-one services are interesting, but they are not the best services available.

Pillar 3a

Best Third Pillar!

Finpension 3a

5.0

Very low fees

Finpension 3a is the best third pillar in Switzerland.

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Pros:

• Invest 99% in stocks

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If you use the FEYKV5 code, you will receive 25 CHF in fee credit. Only for Swiss residents.

Most all-in-one apps offer a third pillar account.

As a benchmark, we can take my favorite third pillar account, Finpension 3a. They have up to 99% in stocks, high customization, and a 0.39% total fee. And you can open five accounts with them to stagger withdrawals.

Alpian has a third pillar account. It currently can open only a single account, but it can be fully invested (98% in stocks and 2% in bonds). It has a total fee of about 0.75%.

Neon offers its own third pillar, Neon 3a (our new Neon 3a review). It is a decent third-pillar account that allows up to five accounts and 99% in stocks. It has a total fee between 0.54% and 0.60% depending on the size of the portfolio.

Yuh also has a 3a account (our Yuh 3a review). It is not a bad 3a, but it only allows a single account and no customization of the portfolio. It is also limited to 99% in stocks. And finally, it has a total fee of 0.65%.

Zak also has its own third pillar account. However, it is unfortunately priced like a traditional bank. The fees are currently around 1.25% for their third pillar with stocks. This means it’s three times more expensive than Finpension 3a. On the plus side, you can invest heavily in stocks and have up to five accounts.

Overall, some of these offers are good, but they are far from competing with the best third pillars. This means that by using one of these options just because you already have a bank account with them, you are losing money every year to fees. Over many years of accumulating, these differences in fees are significant. And not being able to stagger withdrawals with multiple accounts could also make a considerable difference to your taxes.

The Poor Swiss toolbox

I normally value simplicity, but right now, the price of convenience is simply too high, so we are using multiple services:

So, currently, we use five accounts instead of a single all-in-one financial app. But we think it is entirely worth it to save on fees and improve our net worth efficiency.

Conclusion

Currently, there is no such thing as an all-in-one financial solution. By using all the products from a single provider, you are using an unoptimized solution and diminishing your returns.

I do not even believe that such a solution can exist. A product is best when a company fully focuses on it. I would much rather rely on a combination of expert products than settle for a single, subpar bundle. When a company tries to do everything, it cannot do everything well.

Overall, I would recommend you exercise caution when using many financial services from the same provider. It is currently unlikely that you are using the best services.

The unfortunate truth is that these all-in-one services need to do things other than banking to generate more revenue. Banking does not generate much income for these services. And these digital banks have helped bring investing to the masses. They can be a great way to start investing, and people can then move to more advanced services as they grow their knowledge and wealth.

Perhaps we will only see a truly optimized all-in-one financial service when someone reverses the pattern: a high-margin service (like a broker or a third pillar) slowly moving to the banking world.

What about you? Do you prefer using a single app, or do you prefer an optimized toolkit?