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Here you may find answers to the most frequently asked questions.
ETFs are exchange traded funds. Most ETFs simply try to replicate a certain market index (e.g., the Swiss Market Index, SMI) and achieve the same returns. Unlike actively managed investment funds, ETFs do not aim to outperform the index (although most actively managed funds don’t succeed anyway!).
ETFs have the following advantages:
Not all ETFs meet these criteria to the same extent – choosing the right ETF is crucial!
At True Wealth, we find the best ETF for you.
TER means total expense ratio, i.e., the ratio of all costs of the investment fund or ETF (e.g., fund management, portfolio management, auditing, custody) to the actual amount invested. Depending on the complexity, this ratio typically varies between 0.05% and 1%. At True Wealth we try to find the ETF with the lowest TER for you, provided it still meets the other criteria mentioned above.
We use the best ETFs from the large, well-known ETF providers worldwide, selecting the ETFs that we think are optimal for our clients. We are independent in our ETF selection. For some asset classes we use US-ETFs, which are often very liquid and cost efficient. Our ETFs are domiciled in Switzerland, in Europe (Ireland, Germany) and in the US.
A test account allows you to familiarize yourself with True Wealth and test our offering for as long and in as much detail as you wish – at no cost and without any further obligations.
Create a login, answer the survey questions needed to create your risk profile, log in, and start investing! The default asset allocation is set according to the risk profile determined when you answered the initial questions. You may now readjust the asset allocation in line with your personal preferences or your view of the market. Or just sit back and watch your portfolio perform.
Asset allocation in the test account is very similar to the real account. In the real account, you can see the actual ETFs that are behind the chosen asset allocation. Should you change the asset-mix, it will be implemented immediately in the test account scenario, but execution takes a bit longer in the real setting.
Your assets are deposited under your name with the custodian bank. As an asset manager, True Wealth will only execute transactions in the investment instruments selected for you and collect the management fee due. You may withdraw funds from True Wealth or the custodian bank, but the funds may only be remitted to an account that is exactly in your name.
In a real account, if you change your asset mix, the change will not be executed immediately. Find out more in the “Portfolio” section.
You open an account by taking the following steps:
Any person who has reached the age of majority and is legally resident in Switzerland may use True Wealth and open an account, provided there is no suspicion of money laundering or terrorism financing.
True Wealth AG is authorized to provide asset management services in Switzerland only. The relationship between the client and True Wealth is exclusively governed by Swiss law. Unfortunately, it is currently not possible to open accounts for people with a United States background (US citizens, US residents, or persons with "resident alien" status).
The minimum investment required for a True Wealth portfolio is CHF 8,500. This allows us to offer you a tailored portfolio with a sufficiently broadly diversified asset mix.
Once you have invested the minimum amount of CHF 8’500, there is no minimum amount of additional deposits. If you invest very small amounts below roughly CHF 200, then please note that we may keep your deposits in cash until the amount is sufficient to buy additional shares of investment instruments (ETFs).
Your assets will be held in an independent, separate (securities) account with our custodian bank. True Wealth may only execute transactions in the investment instruments selected for you and collect the management fee due. Withdrawals are only possible to an account in your name.
You can chose from an international banking group and a bank with a government guarantee:
We are currently working to allow our clients to have more than one portfolio. At this point, we only support multiple True Wealth portfolios when the custodian bank is BLKB. You can, however, have one True Wealth portfolio with Saxo Bank (Switzerland) as custodian bank and one (or more) True Wealth portfolios with BLKB as custodian bank. If you want to activate a second True Wealth portfolio you may use this link here. Activating an additional portfolio is possible after you are invested with your first one.
Please note that, if you have chosen Saxo Bank (Switzerland) for your first True Wealth portfolio and you now want to add additional portfolios, we will have to open these portfolios at BLKB as custodian bank. In this case, you will have to provide identification documents and possibly information about the origin of funds again.
The minimum age to set up a True Wealth portfolio currently is 18 years. As soon as we support child accounts for parents, grand-parents, godparents etc. we are happy to inform our clients. You may also sign up for a test account here, which allows us to inform you about any such new features, including child accounts.
A True Wealth portfolio can currently only be opened in the name of one person.
If you want to setup an investment plan with recurring deposits, say a certain amount every month or quarter, simply set the recurring money transfer order in your e-banking of your bank. Please find the IBAN of your True Wealth portfolio in your True Wealth user account here.
There is nothing more you have to do, we will automatically invest your deposits according to your True Wealth investment strategy.
Please note that we do not offer a savings plan like banks do, but rather a digital investment solution.
At this point we do not support automated recurring orders for withdrawals.
Our website is mobile friendly and all functionality is fully supported on most mobile devices. Although we don’t provide an “app in the store”, you can install True Wealth as an app on your home screen.
Add True Wealth to your home screen in two simple steps:
There is a tax statement ready in your client area (my portfolio>holdings>tax statement) for the previous tax year. It includes the collective entries for your schedule of securities and assets. In addition, we calculate for you the collective entry for the form DA-1, which you may use to get a tax credit for the foreign withholding taxes.
No: For the time being we may only supply tax documents for Swiss taxpayers.
When selecting ETFs (exchange traded funds) we consider costs as well as liquidity and counterparty risk, among other things. We also use US domiciled ETFs, some of which have extremely low costs and high liquidity. Hence our clients benefit from a very low bid-ask-spread.
From a tax perspective these ETFs are treated favorably regarding US withholding tax on the dividends and interest payments of the securities they hold. At the same time our clients can, in many cases, recover part of the US withholding on the dividends of the ETF itself (see the True Wealth online tax statement). Please note, however, that in some cases upon death of the investor the US estate tax may apply on US securities.
After opening your account with the custodian bank, you will find your account information in the "Deposit/Withdrawal" section in the password-protected area. Just remit your funds to the required account. The sender account must be in your name. You may make additional deposits into your True Wealth account at any time.
Currently it is not possible to transfer specific securities from an existing custody account to your True Wealth account.
We will invest the additional funds you deposit pro rata according to your asset mix in order to retain the asset composition as close as possible to your target allocation.
Log into the customer area and go to the "Deposits/withdrawals" tab, where you can enter and confirm the amount you want to withdraw. We may then sell part of your portfolio and transfer the requested amount to your reference account.
Please note that you cannot make withdrawals that would take your account balance below the minimum of CHF 8,500 (unless you want to close your account).
Log into the customer area and go to the "Deposits/withdrawals" tab, where you can request to have your account closed and confirm this request. We will then sell the contents of your portfolio, charge our management fee, and transfer the full amount to your reference account.
Please note that your account will be closed for good after that.
You have access to any amount you require from your True Wealth account. Please not that you cannot make withdrawals that would take your account balance below the minimum of CHF 8,500.
We check how much of your portfolio will have to be sold to meet your withdrawal request. Subsequently, this portion is sold pro rata to retain your asset mix.
No: If you want to withdraw money, the target account must be in your name.
If you like, you can activate two-channel authentication for your True Wealth account sign in. You can activate two-channel authentication in your True Wealth user settings. True Wealth supports the TOTP standard.
Note the following points:
Your investments are not held in custody by True Wealth AG, but by the custodian bank. This applies to both your cash and your securities (ETF). If True Wealth is taken over, your account with our custodian bank will continue as before, and you will have access to it at any time. Should True Wealth discontinue its operations, your account at our custodian bank will likewise remain intact until you close it or you assign the asset management mandate to a different asset manager.
If True Wealth AG goes bankrupt, your investments will remain in custody at the custodian bank until you instruct it to close your cash and securities accounts, or you assign the asset management mandate to another asset manager. Your securities are held as special funds at the custodian bank. If the custodian bank goes bankrupt, your securities, i.e., all ETFs, will not be included in the bank's bankrupt estate, but will remain your property. Only the amount of cash would be included in the bank's bankrupt estate. In that case, deposit protection would apply to the first CHF 100,000 of your cash holdings.
Cash held with our custodian bank BLKB is even protected by the unlimited state guarantee. This means that the canton of Basel-Landschaft would bail-out all cash deposits booked at BLKB.
However, if there is systemic bankruptcy of several major banks at the same time, deposit protection may reach its limits. For this reason, our portfolio proposals mostly contain only a small proportion of cash (around 2% to 5%), which we need for portfolio management purposes. For risk-averse investors, beside cash deposits protected by the state guarantee of BLKB, we use the ETF on short-term Swiss government bonds.
Your securities (shares of an ETF) are not booked on the balance sheet of your bank. The bank just keeps the shares for you. Even if that happens digitally today, you can compare it to having your own safe deposit box at the bank’s vault. If the bank goes bankrupt, the creditors may not make use of the vault.
However, depending on the custody agreement, a bank may lend shares from one compartment of the vault. This is called securities lending. It is common practice, especially with investment banks. It is mainly used to bet on falling prices – so-called short selling.
If you want to sell a stock or an ETF that you do not own, you first have to borrow this stock. If the short seller runs into difficulties and can not return the borrowed security, it is lost to the owner. So it's good to know that we have excluded securities lending with BLKB and Saxo Bank (Switzerland).
True Wealth uses a questionnaire to determine your risk tolerance very accurately. We believe that our focused catalogue of questions is a very effective tool for determining our customers' true risk tolerance. The questionnaire allows us to assess each customer objectively.
Your risk tolerance has two aspects:
Our questionnaire determines both aspects of your risk tolerance and leads to a matching portfolio proposal, optimized for you situation. Click here to find out more about why your risk tolerance is of critical importance to your portfolio.
Our main objective is to recommend to you the asset mix that matches your risk tolerance on the basis of modern, scientific methods and to give you the best, most cost-efficient access to the asset classes used there. That is why we currently only use ETFs to implement your portfolio strategy.
When selecting ETFs, we search for the lowest fees and adequate liquidity. We are independent and do not have any business relationship with a specific ETF provider so that we are in a position to objectively select the best investment products for you. Click here to find out more about the optimal composition of your portfolio or the selection of suitable investment instruments.
We carefully select each investment instrument we use because we believe that it is the best instrument for investing in the corresponding asset class. We provide an asset management service that aims to meet your investment needs holistically. This means that we may not always be the right solution for people who want to select securities on their own.
No. We believe that we can best meet your investment needs by recommending an asset mix that is optimized for your risk tolerance. We then implement, monitor, and regularly adjust this strategy with carefully selected instruments.
To deal with deposits and withdrawals, your portfolio is adjusted as soon as possible, although this also depends on external factors, such as stock market holidays.
Otherwise, the most efficient method is to readapt your portfolio to the asset mix as soon as its current composition differs from this mix by a specified amount. Fixed intervals (e.g., monthly or quarterly adjustments), by contrast, tend to entail higher costs. For this reason, we continuously monitor your portfolio and adapt it to the requested asset mix whenever necessary. We cannot provide any advance information about the timings, as they are influenced by the performance of the individual asset classes.
To provide maximal cost efficiency and fair treatment of all our clients, we pool trades across client portfolios.
Currently we typically perform these trades every other business day, i.e. two to three times a week, except for holidays (including holidays on which Swiss, European and US stock exchanges are closed) or extraordinary circumstances. Typically one business day after buying and/or selling the necessary investment instruments (ETFs), we do the foreign currency trades necessary to balance your foreign currency positions in your True Wealth portfolio.
When you withdraw money from your portfolio or close your portfolio, we then instruct our custodian banks once the securities (ETF) trades and currency exchanges are carried out to transfer the money to your external bank account. Please do allow for a couple of days for this process.
True Wealth's optimized asset mix uses Swiss and global asset classes. It has been optimized for investors whose future financial needs and expenses are primarily expected to be denominated in Swiss francs. We report on your portfolio in Swiss francs.
Investing involves risks. A detailed summary is given here: Risks Involved in Trading Financial Instruments.
Apart from the doumcent Risks Involved in Trading Financial Instruments the custodian bank refers to the following document in their account opening forms: Risk Disclosure Statement For Foreign Exchange And "Contracts For Difference (CFDs)".
True Wealth charges an asset management fee of 0.50% a year of your assets managed by True Wealth. The calculation is based on the average daily assets at the end of the day.
Our management fee includes transactions costs (creation, adaptation to target weightings, portfolio reduction); i.e., trading commission markups charged to you by our custodian bank will be deducted from our management fee in the next fee statement. There is no right to having the commission reimbursed.
No fees are charged for deposits and transfers to your external bank account. There is no custody fee, no retrocession fee, no postage charge, no service fee.