Frankly 3a Review 2025: Pros & Cons

Frankly 3a from ZKB

Frankly is a third pillar account offered by the Zurcher Kantonal Bank (ZKB).

ZKB is a large bank that was established a long time ago. They started Frankly as a mobile-only service to appeal to the younger generations. They also focus on people investing in their pillars. As we will see, you can invest a large portion of your funds in stocks with this third pillar account.

Frankly is a very new service. ZKB officially launched Frankly in March 2020, but they already have 100 million CHF of assets under management. One good thing about this service is that they promised that the fees would go down as more people use it. ZKB already reduced Frankly fees by 0.01% once they reached 100 million CHF, so hopefully, the fees will go down even lower in the future.

Investment Strategies

Frankly is highly focused on investing in the stock market. You can choose between nine different strategies in your Frankly account:

1. Light 10 Active
   • 75% bonds
   • 15% real estate
   • 10% stocks
2. Gentle 25 Active
   • 59% bonds
   • 26% equities
   • 15% real estate
3. Gentle 20 Index
   • 67.5% bonds
   • 20% stocks
   • 5% real estate
   • 4.5% commodities
   • 3% precious metals
4. Moderate 45 Active
   • 45% stocks
   • 40% bonds
   • 15% real estate
5. Moderate 45 Index
   • 45% stocks
   • 42.5% bonds
   • 5% real estate
   • 4.5% commodities
   • 3% precious metals
6. Strong 75 Active
   • 75% stocks
   • 20% bonds
   • 5% real estate
7. Strong 75 Index
   • 75% stocks
   • 12.5% bonds
   • 5% real estate
   • 4.50% commodities
   • 3% precious metals
8. Extreme 95 Active
   • 95% stocks
   • 5% bonds
9. Extreme 95 Index
   • 95% stocks
   • 2.5% real estate
   • 2.5% precious metals

The number in each of these strategies is the allocation to stocks. So, the Extreme 95 Index strategy allocates 95% to stocks, while the Light 10 Active strategy only allocates 10% to stocks. The rest is invested in bonds, precious metals, commodities, and real estate.

Active denotes active investing, while Index denotes passive investing. I am a firm believer in index investing. If I were to use Frankly, I would use one of the Index strategies. I would recommend against using the active versions.

It is excellent that you can invest up to 95% in stocks. And you can get 100% invested since the rest will be invested in real estate and precious metals.

Each strategy invests in a single fund from Swisscanto (a subsidiary of ZKB). So, if you want details, go to the Swisscanto website and look at the fact sheet of the funds. I wish that all this information was available transparently on the Frankly website. There is a considerable lack of information on the Frankly website.

The Extreme 95 Index strategy seems good. It uses Passive investing through indexes. However, they do not share which indexes are being used. It is another transparency issue with Frankly.

We can take a look at the detailed allocation of the Extreme 95 Index strategy. This strategy uses the Swisscanto (CH) IPF III Vorsorge Fonds
95 Passiv NT CHF fund. Here are the essential characteristics of this fund:

• The TER is 0%.
• There is a 0.10% issuance fee.
• There is a 0.09% redemption fee.
• 30% is invested in Swiss Stocks.
• 65% is invested in foreign stocks.
• 2.5% is invested in Swiss Real Estate.
• 2.5% is invested in precious metals.
• At least 70% is held in CHF.

This last information is essential but is often overlooked by investors. Only 30% of Swiss shares are in this fund, so investments in foreign shares are being hedged against CHF. Currency Hedging means you get insurance against variations of the currency pair that would cost you money.

Currency Hedging is a good tool but not a long-term tool. It is excellent for hedging your investments in the short term, but it is too expensive for long-term investing.

The fact that a large percentage of foreign currencies are being hedged is a significant disadvantage for Frankly in the long term.

Overall, the investment strategies of Frankly are good but could be better. It is terrific that they have passive investing options. And they let you invest a significant portion in stocks. On the other hand, transparency could be much better, and the hedging will cost too much in the long term.

Sustainable Investing with Frankly 3a

You can also choose to invest sustainably with Frankly 3a. They will use Environmental, Social, and Governance (ESG) factors to decide which companies to invest in. With these factors, many companies are blacklisted from investment, such as weapon companies.

As with everything they do, they are not very transparent about the details behind their offer. They only offer active funds for sustainable investments and use the Swisscanto blacklist for selecting companies. However, they do not share many details about the companies that were selected.

Their strategy is very similar to what most 3a do, using simple factors such as the ESG. Nevertheless, it is still good that they offer such an option. Sadly, they do not share the details of their funds as any good third pillar should.

Frankly 3a Fees

In the long term, fees are extremely important. Therefore, we need to look at Frankly’s fees in detail.

Regardless of your investment strategy, you will pay 0.45% in fees to Frankly. You will lose 0.45% of your invested money every year. Even if this fee seems high, it is pretty low for third pillars in Switzerland.

In addition, you will have to pay some fees based on your chosen funds. These are mostly issuance and redemption fees. The issuance fee is due when you buy new shares, and the redemption fee is due when you sell shares. For instance, with the Extreme 95 Index strategy, you will pay a 0.10% fee when you invest and a 0.09% fee when you sell.

Issuance and redemption are not as bad as management fees because they apply once (unless you change strategy often). But you need to keep them in mind. If you are investing in the short term (if you are close to retirement, for instance), these fees may affect your profits.

There is a critical thing with these fees. The 0.45% all-in fees apply to each of the investing strategies. This means that even if you invest only 10% in stocks, you will pay 0.45%. So, you will pay a high fee for very little investment. It makes Frankly a bad third pillar for investing little in stocks. If you do not want to invest a lot of money in stocks, Frankly is not for you!

On top of that, there are the costs of hedging. It is difficult to put them in absolute since this will depend on the future. But on average, we can say that this will be at least a 0.20% extra fee per year. And it could be more.

Overall, Frankly’s base fees are good. However, the hedging costs may weigh you down.

If their importance does not convince you, read about why investing fees are essential.

Open a Frankly 3a account

You can directly open an account using the mobile application.

You can download the application from your favorite app store and follow all the basic steps of creating an account. During the process, it will ask you for your ID, so make sure you have it ready. It is a straightforward process that is well done.

I will not go over all the steps. The entire process is straightforward, and anyone can follow them without any help.

Once you are done creating your account, you can directly fund. Frankly will give you the necessary forms if you already have another third pillar account you want to transfer. You can fill out the form and post the documents. They will then take care of everything.

ZKB did a good job creating a seamless onboarding process. It is well done and simple, and the application itself is simple and practical.

Something good is that you can create up to five accounts for yourself. It is an excellent feature since it will allow you to save money on taxes. For more information on that, I invite you to read my article on the third pillar.

Overall, there is nothing wrong with the onboarding and the usage of Frankly.

Security

To invest money in financial services, you must ensure good security.

From a technical point of view, Frankly 3a has good security. The app is linked to your phone. Having your password will not be enough for anyone to access your account. It is the default way of securing mobile applications these days.

Your invested assets will be held in your name as shares of the various Swisscanto funds. If ZKB fails, the shares will still be yours. It may take some time to recover, but it is safe. ZKB will hold the cash.

Overall, Frankly 3a’s security is fine. It does not do anything special but provides the same security level as similar apps.

Alternatives

It is imperative to compare with existing alternatives.

There are many available third pillars in Switzerland. But most of them are quite poor. Frankly is among the good independent providers. But there are some very interesting alternatives to Frankly.

Frankly 3a vs Finpension 3a

Best Third Pillar!

Finpension 3a

5.0

Very low fees

Finpension 3a is the best third pillar in Switzerland.

Use the FEYKV5 code to get a fee credit of 25 CHF!

Pros:

• Invest 99% in stocks

Grow your 3a with FEYKV5 code Read my review

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

I use and recommend Finpension 3a as the best third pillar in Switzerland. So, we should see how Frankly compares with Finpension 3a.

First, if we look at the fees, Frankly is slightly more expensive than Finpension. Indeed, it has a TER of 0.47%, while Finpension’s fee is 0.39%. This difference is significant and could make a difference over the long term.

With Finpension 3a, you can invest up to 99% in stocks, but only 95% with Frankly. Investing 4% more in stocks could make a significant difference in the long term.

From a usability standpoint, Finpension 3a has a slight advantage since it also offers a web application, not just a mobile app. It is good for people like me who are not fond of mobile phones.

One place where both services differ is in the information they share. With Finpension 3a, you can get the details of the indexes they are invested in. And you can get good information directly from the website and the app. On the other hand, Frankly is not transparent. They always refer you to PDFs of Swisscanto and do not share in which indexes they invest, only in which fund they invest. So Finpension 3a is much more transparent than Frankly.

The most significant difference between these two third pillar accounts is in currency hedging. Finpension 3a does not force you to hedge many of your foreign assets. With Frankly 3a, you will have a minimum of 70% of your portfolio in CHF with currency hedging.

It will be costly in the long term since you will miss out on returns. If you are close to retirement, this may be an advantage. But for most people, this will be a significant disadvantage. And this difference will make Frankly more expensive than Finpension 3a.

In addition, Finpension 3a is much more flexible, as you can have 99% in foreign currencies. For aggressive investors, this could make a very significant difference.

So, given the lack of transparency and mandatory currency hedging, Finpension 3a is significantly better than Frankly and remains the best third pillar.

If you want additional information, I have an entire Review of Finpension 3a. In the future, I may make a complete comparison of both services. But for now, Finpension 3a is still the best third pillar.

I may compare both services completely in the future. Let me know if you are interested.

FAQ

Frankly 3a Summary

Frankly 3a

Frankly 3a is a third pillar account by the Zurcher Kantonal Bank (ZKB). It has acceptable fees and allows to invest up to 95% in stocks.

Product Brand: Frankly

Editor's Rating:
3.5

Pros

• The TER is very low, at 0.47% per year.
• You can invest up to 95% in stocks.
• The mobile app is fairly easy to use.
• You can create up to five accounts.

Cons

• A large part of the foreign currency is hedged to CHF. It will lead to lower returns in the long term.
• There is a strong lack of transparency on the website.
• You cannot customize your portfolio yourself.
• You can only use it on your phone.

Conclusion

Frankly is an acceptable third pillar account. It is significantly better than most third pillar accounts out there. The fees are pretty low, and it offers a significant investment in stocks. The fact that it’s mobile-only could also appeal to many people.

However, it is not the best third pillar. Currently, Finpension 3a remains the best third pillar available in Switzerland. Finpension has several advantages over Frankly:

• Finpension 3a does not force you into hedging
• Finpension 3a lets you invest more in stocks
• Finpension 3a enables you to use a customized portfolio
• Finpension 3a is much more transparent
• Finpension 3a is cheaper

If Frankly offered non-hedged alternatives, it would become much more interesting! In the meantime, it is a good third pillar account, but Finpension 3a is still the best option.

If you want more information on the best third pillar, I would recommend reading my review of Finpension 3a.

If you want more information on Frankly, you can read my article on Frankly Vested Benefits.

If you are using Frankly, I would love your feedback on this service.

Recommended reading

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