Interview with the Boss: Patrik Schär, CEO Selma Finance

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Today I had the chance to interview Selma Finance CEO, Patrik Schär.

Selma Finance are one of the leading roboavisors in Switzerland, collecting an impressive 4.7 out of 5 in our recent selma finance review, and are based in Zurich.

Let’s see what the man behind the swiss roboadvisor has to say.

IH: Welcome Patrik! To get started, could you tell the InvestingHero audience a little about your background, and how you got to being CEO at Selma Finance?

PS: “Sure! I’m a former banker and financial analyst and have worked in various positions in Swiss banking for a bit over 10 years.

Then I became kinda uncertain if this is what I wanna do for the rest of my life. I ended up moving to Copenhagen to do my Master’s degree where I got in touch with the vibrant startup environment.

I was impressed by how close to the customer all those companies were. How could the banking industry operate so far from the customer while it’s about such a personal topic?

One thing led to another: met my co-founders, Kevin, Mikael and Valeria, in the Nordics, we discussed how in-transparent, overpriced, impersonal and unexciting personal finance was and started our mission to change that with Selma.”

IH: I’m a big fan of the mountain you grew up on, I try and get up there a few times a year. But what was it like growing up there? Your legs must be the size of tree trunks walking up and down that hill for school.

PS: “As a child you don’t really notice that you live in a bit of a special place. For me it was very normal to ski to school and to take ski lifts, cable cars and the red cog train as means of transportation to get home so I could avoid the walking uphill.” 🙂

IH: And so, you moved from a comfortable job in banking to taking on much more risk and co-founding Selma. How did that come about? What was the day like when you decided ‘lets do this’ and you committed to Selma Finance?

PS: “There wasn’t a specific day. When I left Switzerland to study in Denmark I was pretty much ready to explore whatever life had in mind for me. So it happened pretty organically connecting the impressions and knowledge I had from Swiss Banking with the new things I learned and the new people I got to know.”

IH: Tell us a little more about Selma Finance – What’s your elevator pitch and USP compared to the competition?

PS: “Selma is a digital financial advisor. Selma gives you advice and develops a personalized plan for you based on your overall financial situation and wealth structure – in an easy and understandable way.

In my opinion, the view of the overall wealth and its changes is missing in many of the available tools / solutions.

When you look at how wealthy families manage their wealth you can see how much effort they put into developing their plans and structuring their wealth in the right way. It’s ultimately the most important factor for successfully achieving your financial goals.

We help our customers to do what wealthy families do – in a lightweight way.”

» Related reading: Selma Finance Review 2020

IH: What’s a typical day like for you, as CEO, at Selma Finance?

PS: “My days are pretty diverse and interesting: I’m in charge of strategic questions, partnerships, our investors, HR topics and our financial algorithms.

Also I try to still spend quite some time with our customers and their specific questions as they are the ones that are ultimately deciding if we’re doing a good job and developing Selma in the right direction.”

IH: That’s a huge role. And Selma seems quite a lean startup company with 10 employees. As CEO, how do you balance your time & attention towards the higher level strategic stuff you mention vs. the nitty gritty of day to day operations?

PS: “That’s indeed a challenge sometimes and in a small company like ours you often need to switch between the two on a daily basis. In terms of strategy we manage the company with a goal-setting concept called OKRs (Objective and Key results).

They allow our teams and employees a lot freedom and responsibility to set and achieve their goals. We update them every three months, so every quarter I’m spending a bit more time “strategizing” than on my usual days.”

IH: You didn’t mention anything yet about the ‘emoji audit & compulsory culling’ meetings I proposed in my review, are they not a thing yet?

PS: “Haha, we don’t have a meeting about it yet. Our financial bot Selma just really likes them. 😉 

Seriously, we think that while personal finance is a serious topic it deserves to be handled in a more relaxed and less stiff way than banks do it. An emoji here and there is part of how we express that communication differs from stiff and dusty banks.”

IH: In all seriousness, it’s been a wild ride in the markets this year. How has this impacted things at Selma, and how are your clients handling it?

PS: “Yes, it’s been a wild ride in the markets indeed. With Selma’s system to measure under- and overvaluations we were gladly not fully invested in the markets (as they were overvalued before the crisis) and kept cash and precious metals instead. These we moved back into the markets after they corrected. That has prevented some of the losses for our clients.

IH: And for you personally, Patrik? Did you stay invested and buy up more stocks during the downturn?

PS: “Yes, I stayed invested and stuck to my long-term investment plan, investing part of my income monthly independent of the markets, exactly as Selma preaches it.”

» Related reading: My favourite investing books for newbs

IH: We can’t not talk briefly about Coronavirus – how is this impacting the team and your day to day operations? What are business challenges associated with this shift to remote working?

PS: “As an online business we are very used to working remotely. In that way Corona hasn’t impacted us much. On the client side we focused even more than we already did on excellent customer service and communication, to make sure that there is always somebody to chat with if you’re worried or think your investments are to risky.”

Combined with proactive communication about what’s happening in the markets this has led to records in both new clients and new assets in the last months.”

IH: The roboadvisor space in Switzerland has had a few casulties in the last 12months, with the likes of Eliva and Scalable Capital shutting down operations. What’s your take on that, how can we be confident Selma is here in Switzerland for the long haul?

PS: Yes, we were sad to see that some providers have given up early. It takes a bit of time to build trust and we’re convinced that digital financial advice has a lot of advantages over the classical banks where you need millions to qualify as a good and worthy customer.

Selma is backed by a group of committed investors and with the current growth we’d be stupid to stop, we plan to be around to challenge the financial industry for quite a bit more and longer. 🙂

IH: On a similar topic, what’s the ‘Selma vision’, and where do you see the company going? European expansion, partnering with banks etc etc.. or something else?

PS: We’re currently working on the European expansion and also some of the most requested features by our customers (e.g. we plan to release native mobile apps). You can check out our open roadmap to see what we’re working on exactly.

IH: Selma has grown at quite a pace in recent years, and as I understand you now have over 1800 clients and a double digit million CHF amount under management – congratulations! What have been some of the mistakes and stumbling blocks your’ve encountered in this growth process?

PS: “I’m proud to say that there haven’t been many major things. We have probably learned to be a bit more organized with everything we do compared to our early product development days.

Of course, every day brings its own challenges and questions – but with time we as a team are getting better in handling all kinds of positive and negative surprises.”

IH: Regarding the Selma platform itself, tell me a little about how you evaluate risk and build portfolios for customers.

PS: “In a first step, we define the right risk level for every customer based on the personal financial situation – during the onboarding chat with the Selma bot we get a lot of data points about it.

Based on that risk level we build a tailored portfolio. Then we adjust based on the valuations of the financial markets. This means we buy a bit less when markets are expensive and a bit more when they are cheap, as markets tend to go back to their fair price over time.”

» Related reading: 8 Common Investing Mistakes You Must Avoid.

IH: The investing industry is littered with hidden fees and exessive charges. What can users realisitcaly expect to pay with Selma?

PS: “Selma clients pay an all-in fee of 0.68% (even includes stamp duty tax) or an all-in fee of 0.50% for portfolios over CHF 150k. In addition, there is the management fee of the ETFs which is 0.22% in average. That’s a total 0.72% – 0.90% and significantly cheaper than most of the assets managers in Switzerland.

There are actually not many that keep your fee below 1% when you look at the overall costs.”

🎁 Reader Bonus: If you use the following invitation link you won’t have to pay ANY management fees upto 5K CHF for the first year. That’s completely free portfolio management, for an entire year!

IH: Sustainable investing is an overpriced fad. Change my mind.

PS: “You are right, sustainable investing is usually overpriced! We don’t understand why the financial industry demands a premium for investing sustainably!

With Selma there isn’t a difference in price when you invest sustainably, it costs exactly the same.”

IH: You are very transparent with your roadmap, and it’s cool to see new offerings such as the pillar 3a come to fruition. What else can we expect to see coming on the roadmap? Anything exclusive you want to share with our audience?

PS: “I can’t spoil too much but there’s something very special and unique coming up for our clients in early autumn. You’re the first to know as soon as I’m able to share more” 🙂

IH: What do you feel are the biggest challenges to personal finance and investing in Switzerland, and how is Selma addressing these?

PS: The financial industry has done a great job in making finance as complicated and annoying as possible.

Therefore a lot of people understandably don’t feel like spending time on the topic, even though it would be very important for them and their financial future.

Selma wants to make financial advice easier, more transparent, more accessible and friendlier (even with an emoji from time to time 😉 )

IH: What advice would you give to someone that hasn’t started investing yet?

PS:

• Build enough emergency funds / cash buffer
• Make a solid plan, taking your future expenses and income into account
• Invest for the long run
• Diversify in different investments
• Get started with a smaller amount and build wealth over time
• Use a digital advisor (like Selma 😉 ) if you’d like to have assistance doing the points above.

» Related reading: How to Create a Simple Budget Plan

IH: What are you reading at the moment?

PS: I’m reading “Deep Work” from Cal Newport.

IH: Great book. What apps/websites/tools can’t you live without? Any recommendations for personal finance/investing?

PS: For work purposes we use Flowdock and Front. Other often used apps on my mobile are Whatsapp, Instagram, Quora and NZZ.

IH: And finally, if you could take one investing/personal finance tip to a desert island, what would it be?

PS: On a desert island I would probably not care that much about personal finance, I would probably take a bottle of water to stay liquid (what a bad personal finance joke 😉 ).

Great stuff! Thanks Patrik for your time today!

Interested in trying Selma? Why not setup a free demo account to try out the platform and create a dummy investment portfolio – free and without obligation (just an email address) and you’ll be up and running in 10mins.

🎁 Reader Bonus: We’ve partnered with the roboadvisor Selma Finance to give our readers (that’s you!) a special offer when you open a live account.

If you use the following invitation link you won’t have to pay ANY management fees upto 5K CHF for the first year. That’s completely free portfolio management, for an entire year!

About the author

I’m anonymous on the blog, so I guess you can call me ‘Mr Investing Hero’, or ‘Mr IH’ for short 🙈

I’m a British expat who’s been living in Switzerland for the last 10 years. I’m a digital marketing professional by day, and a finance and investing blogger by night.

You can read more about me here.

Thanks for reading!

Mr. IH