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clevercircles is a new Robo-advisor in Switzerland that has been brought to my attention. They are adding a community feature to the Robo-advisory world. Some people have asked me whether they should use this Robo-advisor or not.
So, in this review, I analyze clevercircles in detail to see how good they are really, how much fees we need to pay, and how they invest their money.
By the end of the review, you will know exactly whether you should invest with clevercircles or not.
clevercircles is a relatively new Robo-advisor, started in 2018. The CIC Bank Switzerland developed it. The CIC Bank Switzerland is a licensed bank in Switzerland since 1909. The CIC Bank Switzerland is a subsidiary of the larger Bank CIC banking group from France. And the CIC group itself belongs to Credit Mutuel, a very large French banking group.
As we will see in the next section, it is a Robo-advisor with a twist because there is also a community element that no other Swiss Robo-advisor has.
To open a clevercircles account, you need to be 18 and be a Swiss resident.
You can use clevercircles with the web application or the mobile application on Android and Apple. It is great to have both options.
It is important to note that clevercircles is only available in French and German. There is currently no support for English or Italian.
The investing strategy of clevercircles is fairly simple. Based on your answers during the onboarding, they will propose you a portfolio. This portfolio will be composed of index funds and ETFs. Interestingly, they use both index funds and ETFs.
They are only using index funds and passive ETFs. This is good because all of their choices have low fees and good diversification. So, the default investing strategy makes a lot of sense.
You can also customize your portfolio very deeply. For instance, I could create a portfolio with 97% (the maximum) in stocks and 3% cash. But I could have used other asset classes:
- Real estate
It is excellent that we can customize the portfolio to our needs. This is really for advanced investors. And starting investors can simply follow the portfolio that is recommended.
There is a minimum of 5’000 CHF to open an account with clevercircles. I feel like this is a little too high. Several Robo-advisors allow you to create an account with significantly lower minimums.
On the other hand, it is good that they have a demo account for people that want to test the application. But it would be even better if it would be possible to test this service with a lower minimum.
Now, there is a second part to their investing strategy: circles. People can be grouped in a circle. You can see them as an investing group. You can belong to several groups, and you can invite people t your groups. The analogy is the same as meeting every month with a group of friends to discuss investing. At the end of the meeting, you will get a recommendation on how to invest for the following month.
Every two months, all the users of clevercircles are being asked questions about the different asset classes and the future of the markets. This information is then combined within groups to propose rebalancing to the members of the group. So, if all the members of your group are bearish on real estate, the system will likely propose you reduce your real estate allocation.
Once you receive such a proposition, you are free to accept it or not. This is just an automated rebalancing proposition based on the point of view of the members of your circle.
I do not like this feature. I think it makes no sense. Passive investing and asset allocation are here to define your portfolio based on your goal and let the market do the rest. Changing portfolio every two months based on people that have no more clue than you about the future of the market completely defeats the purpose of investing passively.
It has been shown that active investing does not produce better results in the long term than passive investing. clevercircles tries to do something in the middle with an active choice of passive investing products.
So, if you were to use clevercircles, I would recommend you do not use this feature. You can simply ignore circles (you will be alone in your circle) and use them as a Robo-advisor. But some Robo-advisors will do that just as well, and probably better.
When investing for the long term, it is essential to minimize fees. Investing fees are really important and are almost the only thing you have real control over. So, we need to take a good look at the fees of each Robo-advisor.
clevercircles has a fairly simple degressive pricing strategy:
- 0.65% per year by default
- 0.55% per year starting at 100’000 CHF
- 0.45% per year starting at 200’000 CHF
The management fee has a minimum of 40 CHF per year.
On top of the management, we need to add the fees of the ETFs. These fees depend on the portfolio that you are using. A good average with the ETFs from clevercircles is 0.20% per year.
Finally, you will also pay a spread of 0.135% on each operation. If you are mostly investing in foreign currencies, this can make a significant difference. This is especially important once you liquidate your portfolio to get the cash out because you will effectively lose 0.135% of your money. It is difficult to estimate how much this will come per year, but we should not forget this.
Between the management fees and the ETF fees, we have a fee between 0.85% and 0.65% per year. Overall, this is pretty good! clevercircles is among the cheapest Robo-advisors in Switzerland.
Creating an account
I went through the process of creating a demo account to get a feel of the system. You can create such an account very quickly with the usual questions:
- Your personal information
- Your financial information
- Your financial goals
- Your risk capacity
After this, they will propose you a portfolio, and you will be able to customize it.
However, I had several issues during onboarding. I did the onboarding in French (there is no English version), and there were several obvious typos. And several of the words were not translated. On top of that, I had issues with the sliders to see my investing values, and when moving the sliders, they were still set to zero. For me, it did not look very professional.
Usually, I like to look at reviews of the services I review. However, in that case, there are very few reviews available. On Trustpilot, there is not a single review yet, and it is the same on Google reviews.
On the Apple Store, there are 14 ratings, for an average rating of 4.1 out of 5, but only two complete reviews. On the Play Store, there are 11 reviews with a 4.7 average rating out of 5.
With so few ratings, it is impossible to get an idea of the quality of the service. It is not necessarily a disadvantage. The fact that it is not very mature and few people are seemingly using it is not reassuring if you want to invest a lot of money in the service.
Let’s summarize the advantages of clevercircles:
- Web and mobile application
- Low management fees
- Good customization abilities
- Reasonable minimum to invest (5’000 CHF)
Let’s summarize the disadvantages of clevercircles:
- Very recent Robo-advisor, not mature enough
- It belongs to a French bank
- The community feature is not useful
- Not enough reviews of the tool
- The data on the website is sometimes outdated
- Only available in French and German
- Expensive currency conversion fees
- Many typos on the French version
- The web interface does not work very well
- No English version
I am a little troubled by this offer. I see no advantage of the circles feature that seems to be at the core of this Robo-advisor. And if you remove that feature, they are exactly like other Robo-advisors in Switzerland. They have good fees, but so do other Robo-advisors.
I feel like a Robo-advisor that would only do passive investing without any active feature like circles would be a better fit for investors. It would be easier and would probably produce better returns in the long term.
And they feel much less polished than other Robo-advisor, almost like a beta version of a tool. When I went through onboarding in French, there were several obvious typos and missing translations. On top of that, several features (like sliders) did not work for me during onboard. I would not trust them to invest my money at this stage.
If you are looking for a good Robo-advisor in Switzerland, I would recommend you look at other Robo-advisors.
Have you ever tried clevercircles?