Which type of investor is worthwhile for a robot consultant?


Which type of investor is worthwhile for a robot consultant?

Stuttgart – Allgorithms instead of people: Computer programs give investment tips. For tricky questions, they are often not a good choice – but a cheap alternative when investing in securities.

Picture: Investment 

Instead of a flesh-and-blood advisor, robo-advisors make investment proposals based on algorithms. The investor sits in front of the computer. Robo-Advisor are programs on the Internet that offer investment advice and mediation. They are offered by banks and specialized financial service providers. Advisor is the English term for advisor. However, consumers should be clear about it: The robot consultants in the network are rather limited in their recommendations. “The programs assume that users want to build assets through a securities portfolio,” says Niels Nauhauser of the consumer center Baden-Württemberg. On topics such as old-age provision and general questions, such as whether and how much money can be invested in the long term or whether it is not better to have the money available at short notice: All such things can not be answered by an advisor so far, so Nauhauser.

At the beginning there is always a questionnaire

The advisors work according to a simple principle: Instead of a conversation, investors fill in a list of questions. It varies depending on the Robo-Advisor. There are questions about the investment period and the amount invested. The risk appetite of the investor is also an issue. Some use categories such as moderate or strong risk. Others ask quite specific questions, such as: How would they react if the markets gave way? The risk assessment is a tricky point that many of the investment robots have not yet solved well, says Nauhauser. There are many measurement models. “Depending on how consumers are questioned about returns and risks, they give different answers, which can greatly impact the recommended equity allocation.”

Investors should have basic knowledge

This is one of the reasons why investors should have some basic knowledge when using Robo-Advisor. “Investors must be able to assess the proposals,” says Karin Baur of the journal “Finanztest” of Stiftung Warentest. Depending on the business model, the plant robots offer various services on the Internet. According to “Financial Test”, you can distinguish three categories: Full-Service: These Robo-Advisor not only make an investment proposal and convey the portfolio. You then manage the investor’s safekeeping account on your own responsibility. “You do not have to worry about much anymore, that’s what Robo does,” says Baur. Full-service robos are under BaFin supervision. However, according to Nauhauser, this is not a license to trust: “Banks are also subject to BaFin supervision, and their advice is sometimes very big crap.”

Alternatives with slimmed down service

Half-Service: They work much like full-service robos. Decisive difference: Before each transfer of the deposit, they ask the investor for approval. “You have a little more effort,” says Baur. But at the same time you keep the depot automatically in view. Self-service: These are just tips. “They sometimes give very specific deposit proposals,” says Baur. This could investors get started and invest. Self-service robos are often free. That makes them a good basis for informing. Who wants to try the advice on the net once, without giving up his investment from the hand, for these Robos are a possibility.

Robotic advisers are good choices for securities

If you want to invest in securities, Robo-Advisor is a cheaper alternative to the “expensive and often inadequate” investment advice on a commission basis in banks, explains Nauhauser. “They are usually cheaper,” confirms Baur. In her opinion, robo fees should not be higher than 0.5 percent. Deposits with a low equity ratio, where the odds of yield are lower, should be even lower. Robo-Advisor usually work with ETFs. That stands for Exchange Traded Funds. These reflect certain stock indices, such as the Dax or the MSCI World. Some Robo-Advisors also have Index Certificates (ETCs) and actively managed funds in their product offering, others also have call money. Some do not require minimum investment, others several thousand.

Every tenth would seek advice from robots

Whether Robo-Advisor in this country will prevail with investors? In a Yougov survey, at least one in ten said he could imagine investing money on recommendations from a Robo-Advisor. 30 percent did not want to exclude this. People were questioned who decide or co-decide on finances in Germany’s private households. Only every 100th respondent (1.1 percent) had used a Robo-Advisor before. Most (83 percent) heard in the survey for the first time from the plant robots. Consumer advocate Nauhauser sees through the digital plant robots a big cut. “They disenchant the investment advice, because they show that this is actually a very simple matter.” He also believes that they will dissolve the current landscape of financial advice a bit. Karin Baur sees no end to the classic financial advisor. But the Robo-Advisor will establish itself, she believes. For the providers, they are inexpensive, convenient for investors. “These benefits can not be denied.”