Interview of Felix Niederer, CEO of True Wealth Robo-Advisor| Updated: |
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Today, I have the pleasure to interview Felix Niederer, CEO of True Wealth! I have done several interviews in the past on the blog and they were well received. One of my readers, Roy, suggested that I interview the CEO of True Wealth as well and this is now done!
True Wealth is an online wealth management company, based in Switzerland. It was founded in 2013 and is well established in the asset management sector. Its founders are Oliver Herren and Felix Niederer, the latter is also the CEO and the one I am interviewing today.
They are part of the Robo-Advisor movement that has started this last decade. Instead of paying large fees to active traders, you pay lower fees and an automated system will do the investing for you. This is the case of True Wealth. You choose a portfolio and then every time you add money to your account, it gets invested according to your portfolio.
So, let’s hear what Felix Niederer, CEO of True Wealth has to say!
Can you tell us a bit about yourself?
Sure, I like chocolate. And math. And all things beautiful.
What is True Wealth?
A company with a mission.
What is that mission?
Well, it is simple: We want to become the leading online provider for cost-efficient but truly value-adding wealth management solutions. And this is offered in a unique and unbelievably simple manner.
Why did you decide to create True Wealth?
It was time for me to do something new. I had a vague idea, I mentioned it to Oliver Herren (who is one of the founders of Digitec Galaxus). We started to develop the idea into a business plan. And it made sense.
You are a physicist, why did you move into asset management?
Studying physics is magic, plus you learn to think precisely and be honest to yourself. But it is also a very mature subject, most things have been discovered. The things that have not been solved yet in physics are usually quite intricate. I felt a bit lonely there.
How much liberty do you have to create a portfolio?
Actually a lot. But since we do not try to generate alpha, but focus on competitive or minimal-cost beta, things get straight-forward again.
What are the fees for True Wealth Customers? What are they used for?
Our management fee is 0.50% per year on the assets clients invest with us. This includes custody, rebalancing, deposits, and withdrawals. So brokerage fees of all transactions are included. What is not included is the stamp tax duty and of course product costs (TER, which we try to keep as low as possible, typically less than 0.20%). Our costs are so low that we even make them transparent, see our sample portfolios.
We use this to run and further develop our platform. Also, as our client you do not need to bother searching for the best ETFs, we do that for you.
Is it entirely automated?
Almost. There still is someone approving our block trades before they are sent to markets.
Is True Wealth for everybody?
As we have automated all our processes we are able to offer our solution to people with any degree of affluence. We have reduced the minimum initial investment amount to CHF 8’500 so that people can fully test us with real money. But you should have a certain emotional stability, that is the most important thing in investing besides keeping costs low.
How does True Wealth compare with DIY Investing?
We have many clients who used to manage their portfolios themselves, using trading platforms and spreadsheets. But that can be quite time-consuming. And it might even be more expensive than using True Wealth: Since we rebalance thousands of client portfolios in an aggregated way using block trades we are able to share these economies of scale back with our clients. Also, creating the appropriate risk management tools is time-consuming too.
Do you have any tips for DIY Investors?
Irrespective of investing yourself or using a wealth manager, beware of the currency exchange markups when trading securities or ETFs in foreign currencies, they can be much larger than you think, but they are difficult to spot if you are not an expert.
Anything interesting coming to True Wealth in the future?
Our team is working on a number of intriguing projects, you will certainly hear more from us later this year.
Anything you would like to add?
Thanks for the interview! See you soon on True Wealth :)
TrueWealth is an excellent Swiss Robo-advisor with very affordable prices, making it the best Robo-advisor for serious investors.
- Very customizable
Mr. The Poor Swiss: Thanks a lot to Felix for answering all my questions!
It was really interesting to do this interview. I really like doing these, it is a great way to learn a lot from companies. If you are interested in True Wealth, do not hesitate to take a look at their website. I am personally not a customer of True Wealth but their offer has merits.
There are alternatives to DIY investing. If you are ready to pay more fees, you may simplify your investing work a lot. In the end, it is up to you to decide what you want. For me, I would rather invest by myself and save on the fees. But I know some people find DIY investing much too complicated.
As for DIY investors, we can get two things from this interview. You need to be very careful with your emotions. They are your greatest enemy when you invest! And you need to be careful with currency exchange fees when investing! You could be paying a significant amount of money for it!
To learn more, read my review of True Wealth or my article about Robo-Advisors in Switzerland
What do you think about True Wealth?
Do you have any more questions for Felix?
And who would you like me to interview next?
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8 thoughts on “Interview of Felix Niederer, CEO of True Wealth Robo-Advisor”
I think it’s a great platform, I started with them 2 years ago as I moved into investing and liked the principle of their approach, they also reference literature to support that. They are transparent with their fees and the platform is great, super clear and great visuals.
Limitation I found was the heavy focus on Swiss ETF, though I did realize a bit later on that you could change this yourself and I increased the US part to be more world market reflective. Though by the comment Felix made about currency this might be the reason.
I think it’s a great platform and a lot better than an active fund on the fees, you can set it up and forget, as opposed to making your own trades. So I would recommend for those not confident in this area, or looking for an easy solution.
For me I am happy to make my own now and save a bit on fees, so have divested most of my money to invest on my own.
Thanks for sharing your experience!
Yes, it is much better than an active fund, I completely agree. And it’s great for people who do not want (cannot for some) DIY investing.
How much is the default with CH securities? Is there an upper limit or can I invest 100% in U.S. securities?
Thanks for stopping by!
From memory it was more than 50% of the equities, it does match some of the clients needs, but for me it was to much exposure on a small market.
You can change your mix yourself to have all US equities, the platform has two measures in diversification and risk. Interestingly if you increase the US mix above the default, your diversification measure gets worse…
Also there is only one US ETF I could invest in which was UBS ETF (LU) MSCI USA Socially Responsible UCITS ETF.
again I think it is a great platform and would recommend to others looking to start investing for the first time regularly
Wow, 50% of Swiss equities is very high.
I agree that it’s fine for some people. But in general, 50% of exposure to a market that is 2% of the world market does not make too much sense.
It’s weird that increasing US reduce diversification over CH… I would think it’s the contrary.
It’s really weird that this ETF is the only one you could invest in.
They do not have U.S. ETFs like Vanguard ETFs?
Thanks for sharing all this :)
They provide a a virtual test account where you how they would invest your money. I can really recommend that before you start using them with real money. Also, I’ve found a sample portfolio which is available without creating an account:
US equities is 25%, CH 18% (you can double click the equities row to see details). Of course you can fine tune this, but this is the default for a portfolio with a higher risk.
In my real account, they use iShares, Vangard, UBS and ZKB ETFs.
Yes, I have seen that they have a virtual test account. But I did not try it.
I tried the simulator with a sample portfolio. But it is quite limited.
Thanks for giving the example of your real portfolio! This is really interesting!
Thanks for stopping by and happy returns!
Happy to see you followed my suggestion and did do the interview with True Wealth:-). I am a happy customer of True Wealth since January 2019 and at the time of writing, I am sitting on a return on investment of 17%, albeit with a fairly high equity component of 70+%. I really like their low-fees, intuitive interface, the fact that they do the investing for me which saves a lot of time and obviously their good choices of products which so far have been driving excellent results. I definitely can recommend True Wealth.
Thanks a lot for having suggested it! I always welcome suggestions from my readers!
The stock market has been pretty crazy since the beginning of the year! I am glad you can enjoy these profits at True Wealth!
Just be ready for the next downturn and don’t sell everything ;)
Thanks for stopping by!