True Wealth Review 2021: Pros, Cons & How it Compares

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Overall Rating
4.5 ⭐⭐⭐⭐⭐ · 🏆 Best Allrounder ·

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True Wealth AG was the first online robo-advisor asset management platform for investing in Switzerland, one which is simple to use, technology driven and transparent for customers.

You can automatically generate an investing portfolio based on your risk profile consisting of an array of various global equities, bonds real estate and other asset classes such as natural resources.

The True Wealth roboadvisor will then manage and rebalance your portfolio on autopilot, you just need to deposit the minimum 8.5K CHF with a live account to get started and let the machine do the rest.

True Wealth offer a free demo, with zero commitment, in order to get familiar with the platform, which has the same features as a live CHF funded account.

For newcomers and those already experienced with investing, it’s a great allrounder and scores an impressive 4.5 out of 5 in our verdict.

If you’d like to learn more, then read on.

True Wealth Pros and Cons

ProsCons
  • Transparent & flexible portfolio management
  • Great usability and simple to use
  • Two click tax reporting export
  • 2% of portfolio must be held in cash, so no possibility to go 100% into a single asset class
  • Default portfolio favours Swiss assets, which have limited diversification. In the case of swiss bonds, this results in negative returns compared to global alternatives.

Account opening

True Wealth has a simple account opening process, and although includes some paperwork it’s nothing too difficult.

There are no tiered accounts or different rates for high rollers. All Investors are treated equally.

From the new accounts (the true wealth minimum is 8.5K) to an established portfolio running into the hundreds of thousands – everyone gets the flat management fee + ETF costs, which we’ll cover later.

If you sign up through our link, you’ll receive 50% off your first year of management fees!

How to open an account with True Wealth

Visit Truewealth.ch and select ‘Sign up for Virtual Account’ (or ‘Open account’) in the top right of the homepage, as shown below:

🍊 Maybe it’s just me. But i’d love to know the background behind using a bouquet of oranges for a logo. Anyone else?

Answers in the comments please team TW!

Let’s move on.

We’ll create a demo first, so enter your name, email and password on the following screen and hit next.

You’ll receive a confirmation message to then check and confirm your email:

So far, so good!

Now you can login with your email address and password setup on the previous steps:

Logging in for the first time

When you complete the steps above and successfully login to your account for the first time, you’ll have to complete a risk assessment.

This is standard practice for all roboadvisors and investment platforms worth their salt.

🚩 If they don’t, it’s a red flag. You shouldn’t enter an investment without calculating your risk.

Risk will differ from person to person, and is an important step in creating a balanced portfolio you are comfortable with.

With True Wealth, you start with a rating of 5 and the answers in the following steps will move this figure based on your responses, to max of 10. Although 9.8 is about as high as the thing will go in reality.

The process takes around 10 minutes the first time and can always be adjusted later should your circumstances change.

Tick the box after you’ve read what True Wealth is (and isn’t) in the popup box, and hit next:

Question two – ‘What do you expect from a wealth management mandate?‘, attempts to gauge how long you’ll be investing and the gains you are looking to make.

Again everyone is different. A 5 year investing timeframe will differ to a 35 year one.

Make your choice:

Question 3 – “How do you assess your knowledge and experience in investing matters?” simply wants to gain your experience.

If you view investing as the same as gambling in Vegas, select ‘No experience’.

Otherwise, if you are comfortable with the investing basics and know about stocks, bonds and ETFs, combined with some trading experience, select accordingly and hit next:

Question 4 – “The equity market is often volatile. What do you do when your entire portfolio suffers a 10% loss in a bad month?” seeks to understand how you’ll handle a downturn.

Suprisingly, ‘laughing hysterically and then reaching for more wine’ isn’t one of the choices. That said, this isn’t attempting to be a scaremonger question.

Drops of 10% are not a case of “if it will happen” but “when it will happen” in the equity market.

Seeing your account go from 100K CHF to 90K CHF within a week for first time is very real, and gut wrenching. You will question your decision of moving away from that comfy negative interest swiss bank account. Until that is, it jumps back another 10% a few months later.

» Related reading: 8 Common Investing Mistakes to Avoid

For a long-term (8+ yrs) investor, downtrends are great buying opportunities to get stocks ‘on sale’, meaning you get more for your money.

Remember, a down day, week or month is only a problem if you planned on cashing out your portfolio on that particular day. Otherwise a long term investor will simply buy, hold, and repeat for the years to come.

But if negative drops mess you up mentally, that’s ok. Make you choice:

Question 5 – “What is your annual income?” (gross amount) and “How secure is your income?“, are pretty straight forward and used to understand how much you can afford to lose in a worst case scenario, and how likely you might be to change your investments due to job uncertainty.

The more secure your earning and the higher your salary, the more resilient (in theory) your portfolio will be.

Question 6 – “How many family members are financially dependent on you? “, which roughly translates as “If you have 13 kids to feed your risk tolerance will generally be lower than others“…

Question 7 – “What are your total assets and obligations, and how much will you invest?

The idea here is to get a feel on your financial situation and how much you can realistically afford. If you’ve taken the time to work out your budget, you should be able to give some ballpark figures here to support your risk assessment.

If you haven’t, do that first and then answer the question below:

Question 8 – “Do you intend on making regular deposits into your True Wealth account? ” is another check on your commitment to investing.

The longer the view, the more risk you can stomach:

Question 9 – “Do you intend on divesting all at once, or distributed over a number of years?” again it’s a question about your urgency to get out of the market, the longer durations mean you can accommodate more risk:

I’m not a fan of question 10. I think you should be ‘opted in’ to the cause and have a solid budget and plan before trying to ‘insure’ your investment.

Selecting a high amount of your portfolio in the dropdown to be readily available for cashing out (e.g. 80-90% of the value) will adjust your portfolio to be significantly lower risk.

The data says, that investing in the long term, you don’t worry about it.

But play with the options and see what suits you:

The investment platform

Congrats. You made it through the risk assestment and can now get ‘hands on’ and view your portfolio based on your risk assessment.

The next screen will give you a brief ‘tour’ of the dashboard, I won’t include them all, but hit next to cycle through them:

Making changes to your investment portfolio

For the most of us, you can simply hit ‘confirm investment mix’ and you are done.

However, you might want to change to more equity exposure, or a greater focus on a particular country.

Let’s touch on how you’d do that.

Click on the equity portion of the pie chart and then use the slider to increase the allocation by 5%:

In this example, you’ll notice by increasing your equity portion by 5%, you also increase your risk tolerance rating on the left:

More equities, more risk.

Now let’s make your equities biased towards the biggest economy in the world – the US.

Select ‘drilldown’ in the bottom left, select the US slice, and then drag the slider up 10%:

You’ll see the other regions adjust accordingly as you add more weight to the US.

Click close, and you’ll return to the dashboard.

Once you are happy, simply hit ‘Confirm investment mix’ bottom right, and click ‘Confirm’ in the pop up window:

And you are done! You’ll receive a confirmation message of your investment mix, and your account will now be invested.

To recap – you’ve changed your asset allocation to take on a little more risk, and increased your exposure to our friends on the other side of the pond.

You can do the same with the other parts of your portfolio in exactly the same way.

Login & Security

True Wealth employs 128-bit encryption, with 24/7 access to view and edit your portfolio. You can enable two factor auth through the account settings section, which uses the Google authenticator, which we recommend in order to increase the security of your account.

True Wealth are wealth managers, not a bank.

They’ve partnered with two custodian banks, Saxo Bank AG (FINMA regulated Swiss branch of the Danish bank) as an ‘introducing broker’, and also more recently, BLKB.

All the actual trading, buying and selling, happens with a regulated and protected swiss bank.

Which means, your portfolio investment is held with Saxo Bank or BLKB in your name. Should True Wealth go bust, you still own the underlying assets. They are seperate and independent from True Wealth.

Saxo Bank offers buyer protection up to 100,000 CHF, as does BLKB (with the addition of state protection).

Funding the account

Under ‘Deposits & Withdrawals’ you can see your personal IBAN to send CHF via bank transfer, which takes about 48 hours to see it booked in your True Wealth account.

Bank transfers are the only option to fund your True Wealth account, and a transfer of the true wealth minimum of 8.5K CHF is required to get started with a live account.

As True Wealth is primarily suited for Swiss residents, CHF is the standard currency in the account and used to calculate your risk and currency exposure – True Wealth assumes you’ll be staying in Switzerland for the foreseeable future.

Athough the account currency is in CHF, you can fund the account from different currencies and fund four different accounts with the custodian bank – CHF, USD, EUR and GBP, via unique IBAN’s should you wish.

Withdrawing from your portfolio is also straight forward and can happen anytime you like. You enter the CHF amount and select ‘Request withdrawal’.

You’ll then receive a confirmation email with an attached Saxo Bank branded PDF to complete and sign, which then needs to be sent back to True Wealth via post or email. If you have chosen BLKB, there are no further forms required and the submission is processed straight away.

Once received by True Wealth, the funds will leave your investment portfolio and arrive back in your bank account in roughly 5-7 days.

Fees & Charges

True Wealth are transparent and upfront with their fees, which is refreshing.

A flat 0.5% management fee. The management fee covers transaction costs, deposits, withdrawals, includes no custody fees or other hidden costs. Portfolio rebalancing (the process of adjusting your portfolio for risk) is also included and happens multiple times throughout the year.

True Wealth keeps this portfolio rebalancing low for clients by buying in blocks – e.g. ETF’s are either bought or sold in one go, and this is applied to all client accounts in one hit.

You will typically have to add another 0.10-0.15% for the ETF product costs, so expect to see a total of 0.6% deducted from your account each year.

These ETF product costs will change based on how active you are with tweaking and changing your portfolio, the more niche and exotic you go – potentially the higher the cost. Be aware of those changes by checking the ‘Portfolio Characteristics’ on the dashboard:

The 0.6% doesn’t really become a talking point for new investors until you have a nest egg in the region of the 50K CHF mark.

And even better – if you sign up for an account with my referral link, we both get our management fees lowered by 50% to just 0.25% for an entire year!

Look & Feel

As we mentioned earlier, True Wealth has put considerable effort into the usability of the platform which has resulted in a simple to use and accessible platform.

Outside of Switzerland, there are a number of established services operating a similar asset management business model, such as Nutmeg in the UK and Betterment in the US, which too recognised the importance of an intuitive interface and user experience.

True Wealth partnered early in the process with Gold Interactive, a creative and UX agency based in Switzerland, who led the front end and UX design to meet these market expectations.

Checking your portfolio, transations and performance is simple and snappy to do.

In comparision, going back to your traditional banking account is like sticking pins in your eyes.

Although there is no dedicated native mobile application for iOS/Android, the responsive design works well on smartphones and is just as accessible on smaller screens.

Customer Support

Officially support is available in German and English, and while there is no live chat the support email is generally pretty responsive.

There is no 24/7 customer support available, but email replies are pretty certain. You can also reach them by phone, and they welcome visits to the head office in Zurich.

Additional resources

Not so much offered from a resources and educational standpoint, which is a shame considering they are targeting newcomers to investing.

They do have a blog, which is mainly in German, which in past years had routinely been updated on average once a month on topics such as ETFs, roboadvisors and risk management.

The True Wealth blog in 2019

Unfortunately, so far in 2019 there have only been two posts. Content marketing and educational pieces appear to have taken a back seat for the time being.

Background info on True Wealth

True Wealth AG was founded in 2013 in Zurich, Switzerland by the two founders Felix Niederer and Oliver Herren.

Felix Niederer trained as a physicist, and completed his degree at ETH Zurich. He is an experienced quantitative portfolio manager and before starting True Wealth, he worked at Swiss Re and LGT Capital Partners in various portfolio management roles.

Oliver Herren is an entrepreneur and prior to True Wealth, founded one of the largest online shopping portals in Switzerland – Digitec. He bought this insight and UX experience to co-found True Wealth.

True Wealth officially launched on the 23rd October 2014, and today has over 3000 clients and 200million CHF under management.

Closing thoughts

If you are new or already experienced with investing and based in Switzerland, True Wealth are a worthy entry to educate and familiarise yourself with an asset management environment and build a portfolio.

Now let’s be clear, there are cheaper alternatives for DIY investors and a lot of competition in this ETF & roboadvisor space.

But none which rival the user experience and ease of use as True Wealth, particularly for newcomers to the world of investing.

The idea of purchasing individual shares and working out the correct stock to bond ratio is dauting for newcomers, and for most this friction results in no action, leaving the nest egg to sit in a  current account generating negative interest.

Trying out a roboadvisor such as Truewealth is a logical first step to help newcomers over that first hurdle.

When you are ready to make the next step, be sure to bookmark and use our referral link to reduce your yearly expenses by 50%.

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