Find the Right Wealth Manager With an Algorithm

In today's Tages-Anzeiger, a supplement dives deeper into the topic ‘Future of Finance and Investments’. FinGuide was asked to contribute an article. We decided to address one of our core topics: ‘Find the right wealth manager with an algorithm’ We shed light on the possibilities and limitations of using an algorithm in an opaque market with limited data.

FinGuide has demonstrated over the past five years that we can add substantial value for our clients with an algorithm. However, FinGuide customers know that the algorithm is only one stage in the process of selecting the best wealth manager. The decisive factor is the combination with personal advice.

You can find the text below, here is the link to the article (in German) in the layout of today's supplement. Would you like to find out more about our services? Find out more on our homepage.

Algorithms need data. FinGuide utilizes an algorithm to find the most suitable wealth manager for customers in an opaque market.

Whether in social media, Spotify or Google: algorithms analyze our behavior and make suggestions for content that suits us. The larger the amount of data processed, the more precise the suggestions. The Swiss company FinGuide has been using an algorithm for five years to identify the right wealth manager for investors.

Analysis and Data Collection

Swiss private banking is opaque. There is hardly any usable data on the websites of private banks and independent wealth managers. FinGuide has teamed up with firstfive AG to track down providers that offer their clients substantial added value. The core competence is the detailed analysis of performances and costs of investments. For providers who do not have their services analyzed by firstfive, FinGuide performs the analysis. Those who pass the performance test are checked for fair business practices in the next step. In particular, this involves weeding out those who work with hidden costs. Banks and independent wealth managers that also pass this test can be included on the FinGuide platform. Their offering and various key figures are recorded in detail.

Matching

Investors looking for a suitable wealth manager can provide their needs on the FinGuide website. FinGuide has developed a catalogue of questions for this purpose and refined it over the years. Once the needs have been recorded online, the algorithm searches for the best possible matches with the provider data. However, FinGuide offers more than just data analysis: the results of the matching process are analyzed in more detail in a free of charge personal meeting and customers receive all the information they need about the providers in question. The aim of the meeting is to identify the two wealth managers best suited to the individual's needs.

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Decision

After the FinGuide advisory process which focuses on facts and figures, the next step is for interested parties to get to know their potential advisors personally by meeting with their recommended top two providers. The focus here is on whether their needs are understood and whether a relationship of trust is established. The client then decides on whether they would like to enter into a new business relationship with the providers.

Business Model

Advice from FinGuide is free of charge and yet independent. If FinGuide is able to identify a suitable wealth manager for clients, the wealth manager will pay a fee. The remuneration is exactly the same for all providers. This means that there are no incentives to steer clients towards a particular wealth manager. The minimum assets required to use the service are CHF 500,000.