"Investing to boost your pension plan is becoming more and more sensible"

In view of our demographic context, the issue of pensions is becoming increasingly complex. How to maintain a comfortable standard of living once you reach retirement age? This question everyone is asking. In addition to the basic benefits provided, it becomes essential to rely on additional contributions. A strategy that, in parallel with the AVS and the 2nd pillar contributions, can be a valuable contribution. To make it clearer, Felix Niederer, CEO of True Wealth, which specializes in automated wealth management, outlines his vision. Interview.

The Weather: Overall, what are the main challenges in terms of foresight in the current context?

Felix Niederer: Demographics, with an aging population, are a major problem. In our system, AVS-related benefits are declining, with fewer and fewer young people being able to participate in the collective effort to financially support our seniors. Added to this are very low interest rates. So a sum that sleeps in a savings account yields nothing. Finally, let us mention inflation, which, by increasing significantly in recent times, amplifies the problem.

What advice would you give to supplement your pension plan?

Relying on an investment strategy that includes equities is clearly a good idea in the long run. This is a proven fact, by investing in the stock market with a diversified portfolio for a period of twenty years or more, you get better returns than with savings.

Isn’t the stock market a relatively risky investment area in terms of a pension strategy?

There are two main things to look for. As has been said, a balanced portfolio needs to be built. Stocks, bonds, commodities and real estate are the strong and secure areas in which we invest our clients’ funds. Then again, duration is obviously a central issue. That is why we recommend investment strategies that are spread over twenty years or more.

Also read: The True Wealth robot consultant is opening up to the French-speaking market

Specifically, how does “onboarding” at True Wealth work, and how much money can be used to benefit from your expertise?

We have developed an all-digital solution to facilitate and democratize access to financial services. You can open an account online in just a few clicks. We also work closely with two deposit banks, BLKB or Saxo Bank (Switzerland) SA, at the customer’s choice. A questionnaire then allows us to identify our risk tolerance, income and purchasing power. All these parameters are then integrated into the digital management tool we have developed. The opening of an account is accessible from 8,500 francs.

Compared to traditional trading, how does your investment strategy stand out?

Our robot advisor ensures that the balance defined and desired by the client between stocks, bonds, commodities and real estate values ​​is constantly maintained. This is called portfolio rebalancing. Regardless of the stock market transactions carried out, this balance is maintained continuously. Studies show that this rebalancing has a positive effect on long-term returns. Then we passively follow the stock indices. Several studies have shown that, in the long run, this strategy is the most rewarding. It also has the advantage of keeping brokerage fees very low and avoiding the costs of analysts, which in the long run have a more or less serious impact on clients’ capital. In addition, passive investment instruments (such as ETFs) are diversified in nature, which contributes to a reduction in portfolio risks.

What about the development of True Wealth since its launch in 2014?

The company, founded by Felix Niederer and Oliver Herren, co-founder of Digitec Galaxus, now has more than 750 million francs under management for a total of 12,000 customers. Our Truewealth.ch platform is available in French, English and German with a customer call and follow-up service available in these languages ​​as well. We are also very proud to be one of the most competitive companies in terms of cost constraints in the ranking established by the independent comparative service Moneyland.ch (annual management fees are 0.25-0.50% of the capital to which must be added the annual ETF costs of 0.1-0.2%). This load control, in particular made possible by the automation and digitization of all our processes, allows us to rely on reliable and wise strategies, without seeking to trader at all costs to inflate transaction costs to the detriment of customers.

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