Swiss digital wealth manager Selma Finance has taken advantage of the renewed push to use digital services and the question thus arises whether Swiss robo-advisers in general will be able to benefit from he changed circumstances that followed the lockdown.
«While private banks are struggling to acquired new clients, Selma has seen strong growth,» said co-founder Kevin Linser in an interview with finews.com. Selma Finance has opened more than 1,000 new accounts this year so far, despite the corona crisis and the company has had almost no outflows of capital, according to Linser.
Investors are looking for alternative ways to invest their money and have resorted to relying on robo-advisory more often: «Even before the crisis, retail clients mostly have been left to their own devices in making financial decisions. But now the investment advice literally is out of reach,» said the fintech, which has Swiss and Finnish roots.
Young Company With a Young Clientele
The company promises clients both individual advice and private banking services for an initial deposit of only 500 francs – served to the comfort of your own home. Selma recently expanded its services to include the so-called 3a private pension provision.
The company is most popular with a younger clientele, with more than three quarters at 40 years or younger. More than half of Selma’s clients have increased their invested assets and maintained the long-term strategy despite the crisis.
Robo Advisory Back in Favor?
It thus looks as if robo advisory is back in favor after a slump in 2019. Three providers – Elvia E-Invest, Scalable Capital and Investomat – went out of business last year.
That left the business to VZ Vermoegenszentrum, Swissquote, Saxo Bank, Descartes Finance, Simplewealth and Truewealth as standard bearers.
New Competition Emerging
The tide seems to have turned again in 2020: in past weeks and months, three established banking players have gone live with digital solutions: Zuercher Kantonalbank launched the 3a-app Frankly, Postfinance introduced a complete digital investment solution, and Reyl even announced the launch of a full online bank.
Selma has plenty on its plate, with a lot of work to be done before it can launch in new markets and for a new user experience in financial advisory. The breakeven which the ten-people strong firm wanted to achieve this year had to be postponed: «As we continue to invest heavily into the expansion and growth, this is currently not the target,» said Linser.
