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Robo-advisors enable retirement provision and investments that are tailored to customer needs. The Stiftung Warentest tested 25 providers – and not all of them were convincing in terms of returns.
For many users, investing is still associated with high entry barriers. On the one hand, most of them are now aware that in an emergency, financial advisors at banks are more like salespeople than advisors in the interests of the customer. They are first and foremost committed to their employer and therefore recommend above all that which sells well and is associated with attractive commissions. On the other hand, we all probably know that old-age provision with annuity insurance can no longer bring the income that has been used in recent decades, because the current level of interest rates no longer allows that.
A good alternative can be robo-advisors, who advise the customer on an automated basis, evaluate his risk profile and his earnings wishes and on this basis make and implement investment proposals. The programs work according to standardized procedures and with predefined algorithms. Investors are neither dependent on the opening and advisory hours of a bank, nor do they have to deal with an advisor.
Comprehensive test by Stiftung Warentest
The Stiftung Warentest has now tested 25 of these robo-advisors and has come to interesting results. On the one hand, the consumer protection organization had a deposit with 40,000 euros created, what Quirion (Part of the Quirin Bank), Growney * (Fintech), Robin (Deutsche Bank) and VTB Invest (belonging to the Russian VTB Bank) with a “good” overall result. In the larger depots with 100,000 euros, Growney even received the overall rating “very good”. The depot suggestions from Quirion and were “good” Liqid, followed at a distance by VTB-Invest, Fintego * (Fintech as part of the European Bank for Financial Services) and Robin.
Liqid does not even appear in the 40,000 euro class, as the multi-family office of the Harald Quandt family, HQ Trust, is behind the robo-advisor and requires a minimum investment of 100,000 euros. In most other cases, however, the minimum investment is between 500 and 10,000 euros, with savings plans from 25 to 100 euros per month.
Particularly sustainable ESG portfolios are also possible
Most robo-advisors work on the basis of inexpensive ETF and index funds, many also with ETC (Exchange Traded Commodities), some also with actively managed funds. Around half of the providers can offer a particularly sustainable depot in addition to a conventional portfolio. Scalable Capital (made the headlines last year due to a data protection incident), which otherwise only achieved a mid-range result despite its market leadership in terms of the investment sums managed, offers a more sustainable ESG portfolio in addition to the conventional risk-controlled portfolio.
Nevertheless, Stiftung Warentest has criticized the fees for most robo-advisor solutions that are too high. Costs of up to 0.49 percent were rated as very good, and anything over 1.16 percent per year was rated “poor”. While Quirion charges 0.48 percent for the Robo and 0.16 percent for the selected sample portfolio, it is the case with the Commerzbank company Cominvest 0.95 percent and 0.57 percent, respectively. That is almost the level that is reached with cheaper active fund portfolios. The most expensive provider Vividam, specializes in sustainable investments, charges a total of almost two and a half percent annually if the overall result is poor.
Important difference: How individually are portfolios designed
It is also interesting to take a look at the different risk profiles. While about Kapilendo only offers two different risk profiles, which is clearly not enough for a robo-advisor, providers like Scalable Capital or Minveo to over a dozen variants. It was also important to the testers that the robo-advisor providers initially issued the investment recommendation without mandatory personal data and provided information about the expected return and likely risks. The best rated here were Growney, Liqid, Quirion and Robin.
A large part of the robo-advisor tools is getting to know and developing the depot proposal based on relevant questions. To do this, the tools ask more or less comprehensible questions, which, however, require a certain basic interest in investing. So the Stiftung Warentest comes to the conclusion: “From our point of view, investing by computer is only suitable for investors who are already a little familiar with funds and ETFs.” Quirion, Fintego and Warburg scored “very well” here and are therefore particularly recommended.
Incidentally, robo-advisors who work as financial intermediaries according to trade regulations and are therefore not subject to supervision by the Bafin were not rated. This included, for example, Raisin Invest, known as a provider of world savings, and Savedo.
You can find the full test in the current issue Financial test 7/2021.
Robo-advisors are a good compromise between investing money on your own (which can of course be a bit cheaper in terms of the total costs) and personal asset management, which is often expensive, but not always as individual as promised. The well-rated offers in particular promise a reasonable return in line with the market with the risk that is appropriate to the investment requirements. Indeed, investing and retirement planning is also a service where customers can save a lot of money with appropriate automation.
Investors should keep one thing in mind: Quirion, the oldest provider tested here, has been on the market since 2013, most of which were created in the last five years. This means that no one has gone through a real crisis on the stock market. For example, some of the robo-advisors put up with the setback last year less well than hoped.