Interview of Richard Toolen – CEO of Investart
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Today, I have the privilege of interviewing Richard Toolen, the CEO of Investart. Investart is a new investing service in Switzerland.
I am very intrigued by this new service. They are offering investment in Exchange Traded Funds (ETFs) in Switzerland. And they are offering both a custom portfolio and a managed portfolio. Moreover, they are offering more than 80 ETFs, all passive investing ETFs.
Is it too good to be true? What better way to find out than interviewing the CEO and founder of Investart, Richard Toolen. I asked him many questions, and I am sharing his answers with you.
June 2021 Update: A 12 CHF per month fee was introduced, read my Review of Investart for more details.
1. What can you tell us about yourself?
I have worked in Finance for over 25 years, starting as a trader in Frankfurt in 1994. After working for several years as an employee, I left banking with some colleagues to set up entrepreneurial endeavors of our own.
Investart is an extension of these efforts. I wish to make investing easy and fun for Swiss retail investors and allow them to use their own ideas to inspire themselves, while we help manage the risks. Hopefully, our enabling philosophy will assist them in doing so, and my successes as well as many years of experience in the financial markets (including during the crises of 1997, 2000, 2008 and 2020) are reflected in the Investart platform.
2. What is Investart?
Investart is an online investing service. It allows people to realize their own investment ideas, or else benefit from our expertise and let us compose and manage their investment portfolios. We offer investments into regular (not crypto) asset classes implemented via ETFs.
3. Why did you found Investart?
There is a large number of people who have some savings and would like to invest them. However, many of them are beginners in the world of investing: they do not know how to open a brokerage account, what to invest into, which investment instruments to select, how to find them, how to place a trade. And most importantly: where to start. Investart was founded to help such people achieve their financial goals.
4. What makes Investart great?
What we had in mind when starting to build Investart was an intuitive, fool-proof, and self-explanatory platform. Something that can be used by total beginners in the area of investing. If we have achieved this goal (and our clients should tell us this) – then this is the main feature that makes Investart great.
5. Is it really free?
June 2021 Update: A 12 CHF per month fee was introduced
Online investing is really free: we do not charge any commissions. Our clients do not pay anything for trading, custody, re-balancing, reporting, servicing, no third-party commissions, no VAT, or transaction duties. Check out also our pricing page.
Where we make money is extra value-adding services such as personal financial consultations, wealth planning, and pension planning. These are offered on a one-to-one basis to our affluent clients. In the future, we plan to add some additional features to the platform, such as risk/return optimization of the composed portfolios, which will be subject to charges.
6. What platform are you using?
At the moment Investart is an internet (browser-based) application, which works on any desktop and mobile device. It uses 128-bit internet encryption and 2-factor authentication technologies to ensure data security. We are particularly proud to be one of the first financial companies in Switzerland to offer account opening fully online (and we avoided video-identification in favor of much easier and fun selfie-identification).
We plan to create a mobile app version of the platform and will start working on it in the second half of 2021.
7. In what kind of instruments is Investart investing and why?
We offer investments in ETFs.
Picking individual stocks might result in large financial losses due to wrong title selection (so-called “unsystematic risk”). Experienced investors know this and reduce this risk by ensuring proper diversification. Our main target group is beginners, and ETFs, which are normally diversified investments (there are many stocks or bonds in each ETF), are more suitable for them. Our platform can technically support investing also into single stocks and bonds. But for the time being, we will limit our offering to ETFs.
7. Can you give us an example of a portfolio with Investart?
Here is an example of a CHF-denominated portfolio:
- 5% in Cash
- 28% in Swiss corporate bonds (Investment Grade)
- 9.5% in Global High-Yield bonds
- 13.5% in Swiss mid-cap stocks
- 15.5% in Swiss high-dividend stocks
- 14.5% in US low-volatility stocks
- 9% in Swiss real estate companies
- 5% in Gold.
8. Can we see the instruments being used for each of the portfolios?
Yes, you can see the complete breakdown of your portfolios. You can also click the “i” button of each Investment to find detailed information about it, including which ETF is used for the investment.
9. Can I choose the portfolio myself?
100% customization is possible.
You can build your portfolio fully from scratch yourself. Or you can take an optimized portfolio, proposed and tailored to your personal situation by Investart, and adjust it any way you like by changing the proportions, adding and removing instruments.
10. Is Investart for everybody?
Absolutely. We have talked about Investart being intended primarily for beginners, however, we have noticed recently that many experienced investors are signing up to the platform.
11. Is Investart a good fit for passive investors?
It is a perfect fit since we offer investing via ETFs.
12. Why are you focusing on currency-hedged instruments?
Our platform is intended mainly for Swiss residents, whose main currency is CHF. Imagine you selected a CHF-denominated ETF, which invests in US stocks. After some time US stocks gain 5%, but USD falls 7% against CHF. It turns out that you lost 2%, despite US stocks rising. To avoid such situations, we pick CHF currency-hedged ETFs whenever possible.
Unfortunately not all ETFs have currency-hedged share classes, so there is also plenty to choose from for those who want to keep the currency risk (we have recently added a “currency hedged” indicator to all products).
13. Any other cool plans for the future?
We plan to develop and launch a whole range of new cool “Premium” features during this year and early next year, and will be happy to reveal them once they are ready!
14. Anything else you would like to add?
An important point: at the moment we limit the number of new clients to 1’000 per year. This helps us keep the costs down and pass the cost savings to clients in the form of zero commissions. Please note that if you open an account and do not fund it during the following 1 month (required minimum: CHF 2’000), it will be removed to make space for new accounts.
So, secure your account now. And thank you for having me here, it’s been a pleasure answering your questions!
Mr. The Poor Swiss: Thanks a lot to Richard for answering all my questions!
It was great that learn from the CEO of Investart. I am really intrigued by the service they are offering.
Investart is not really a robo-advisor, and it is not really a broker, but it can be a little of both depending on how you are using it. For me, it seems like it could be a great way for investors to start investing, with an extremely low price
For more information, I have written a full review of Investart and started investing myself.
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Hi,
Thanks for review. I think I will start with them, I read the article as I was creating a true wealth account. I finally stopped the process.
I was also ready to start with IB, and I sent jours on websites to know which etf to choose but but I m not confident enough I think. Any advise on which etf? Something concrete?
Thankd again
Hi Nathalie,
I have a few articles about choosing ETFs:
* Choosing an ETF portfolio
* The ideal ETF portfolio for a Swiss investor
This should help :)
Thank you the article! In the comments you pointed out the difference in taxation between US an European ETF. Could you explain the process of reclaiming the taxes from the US for the US ETF in depth? Or have you done so somewhere else on your website?
Hi Nils,
It’s really not that bad. I have an article coming this month about this that will cover in more details.
But basically, you just have to fill a DA-1 tax return as part of your standard tax declaration. There, you declare the dividends of your U.S. ETFs and you declare the 15% as dividends that you would like to reclaim. It’s even automatically filled as 15% if you select United States (at least in Fribourg).
Thanks for stopping by!
Hi!
I am curious if there is a downloadable “tax pack” or tax information to make tax time easier?
Thanks for this intro!!
Hi Lauren,
I am pretty sure they have a tax statement at the end of the year. Each robo-advisor has such a statement for Swiss taxes.
Hi all,
Interesting offer but a lots of questions. In fact, Investart is registered in Switzerland but money are held by IB.
I am most curious about deposit protection scheme. I cheked out with FINMA and here is the answer I got:
“You can look up online FINMA licenses and registrations
· Authorised institutions: https://www.finma.ch/de/finma-public/bewilligte-institute-personen-und-produkte/ (scroll to find a search function and various lists)
· Membership of self-regulatory organisations: https://www.finma.ch/de/bewilligung/selbstregulierungsorganisationen-sro/sro-mitglieder-suche/ (consider the instructions and the caveat)
· Insurance Brokers (Register) https://www.finma.ch/de/bewilligung/versicherungsvermittler/vermittlerportal/suche/
Investart, from a FINMA perspective is not part of a deposit protection scheme. This is the only investment protection scheme that we can refer you to and it does not apply to said company: https://www.esisuisse.ch/en?set_language=en and it applies to Swiss licensed banks only.”
Hi Miro,
Indeed, the money at investart will not be protected by esisuisse, since this money is in IB.
However, this money will be protected by regulations that protect IB. Currently, IB is protected by FSCS, which gives you a 85K GBP protection (about 100K CHF). And on top of that, there is SIPC protection at IB UK. But this last can still change with Brexit.
Hope this helps
I just spent 2 hours extracting all TER data for each ISIN and building my 2 portfolios. I reached 2 global TERs of 0.30 and 0.28. one classic portfolio (normal indexes, world stocks…) and a disruptive one (IT, healthcare, innovation). I am just a bit concerned about security of assets and the fact that a company without charges may not last long. your view? in case investart goes bankrupt what would happen? I guess a pain in the UK to recover the assets?
Hi Karl,
All of the funds are stored in an IB account in your name. In case of bankruptcy of Investart (or if they close), you will have to claim your account.
It is probably not a trivial process, but I am not expecting it to be impossible either.
I’ll spend some time researching this before publishing the review of Investart.
Thanks for stopping by!
Just an update on this: you can request easily user and pwd of the IB account, so you can see anytime the real situation of the assets.
The investart web interface would need to be improved: i.e. the banking information to send funds are sent only via mail. in comparison true wealth has a much more detailed interface
It’s good to know that you can get access to the account.
Yes, it could be improved, but compared to True Wealth, the difference in price is abysmal :)