Swanest is a robo-advisor startup. Robo advisors are platforms that enable investors to automatically invest in the stock markets around the world. Automatic investing allows investors to buy stocks on a periodic basis and to rebalance each part of the portfolio as it grows and shrinks compared to other parts of the portfolio. Each robo advisor platform is unique and Swanest promises to deliver a platform with a suite of functions which will enable investors to design an investing mechanism suited to their own unique needs. Silvan Schumacher of Swanest accepted to answers some questions from InvestItin.com
What is the story behind Swanest, how did you get here?
It’s been quite a journey so far. Most importantly, we wanted to launch a robo-advisor in Europe already two years ago. However, we quickly identified these services to come with big problems, especially regarding the acquisition of new customers.
In fact, you need to pay a bag full of money to make someone using a robo-advisor. This didn’t make sense to us. If you have a product people really love and want, why paying so much?
At that time, we were lucky to join the NEST’up accelerator program in Belgium, which made us focus on our customers. We conducted interviews and gathered lots of feedback to better understand their problems and needs when it comes to investing.
From there, we started to rethink robo-advisors and are currently co-developing a new investment service together with our users. Hence, what you see online will still shape quite a bit.
What will be key advantages that your platform will offer to investors?
Swanest is a smart and simple online assistant that helps self-directed investors in building and managing personalised investment portfolios.
We focus on people that want to invest themselves via an online brokerage service. These platform offer a great deal of personalisation, as you can invest in any stock, ETF or mutual fund you might like. However, these services remain very complex to use and do not offer any intelligent guidance.
With Swanest we completely redesign this experience. We look at the questions self-directed investors face and use best practices in investing to guide them in the investment process in a simple, but powerful way.
If you compare us with a robo-advisor, then we differ in the way that we do not offer one-size fits all portfolios, but help building truly personalised portfolios consisting of potentially any stock, ETF or mutual fund.
You have generated quite a buzz on social media with more than 10k followers on Twitter, what is your secret sauce?
For us it was very important to establish channels to potential customers from very early on. As we have been here for a while, and as we focus on including our users in the development process, we keep getting more engagement.
One important feature which investors look for in robo advisors is fees, can you give us any clues about your fee structure?
Fees are crucial and if you look at the ones of online brokers today, you will quickly get a big headache.
We will introduce a plan-based model. Depending on how much you invest and how much you trade, you will end up paying a fair and transparent fixed amount each month.
Will your service be open to all European residents?
We do focus on the European market and will launch across the continent. However, we might not serve all the markets from the very beginning, but will open in those countries in which we experience most interest first.
Will your service be open to Americans?
This part is trickier and will not be part of the initial launch.
How will the ecosystem of robo advising evolve in the next ten years?
Most importantly, lots of financial institutions will launch robo-advisors that will enable automatic investing in stocks, in the upcoming years. Some of them might partner up with startups, to accelerate the speed to go-to-market. Other ventures will struggle to attract sufficient assets and go bust.
In terms of innovation we can observe a focus on either objective-base investment planning or preferences. I guess this will hold on for a while.
Besides this, we cannot observe any leap in innovation. We will play this card and keep innovating around the problems and needs of our users. Frankly speaking, our heads are full of things we want to do, but we also understand that focus is key in the beginning. In the end we want a truly great investment service for ourselves, and we have not seen it out there so far.
In this process, we invite everyone to visit Swanest and to tell us about their thoughts and ideas, we will consider each single one of them!
I am quite excited that Swanest will potentially you allow investors to fund their portfolios using Bitcoin, what is the likelihood of this feature being part of your system?
It will not be first priority, but investments into Bitcoins, but also other alternative assets will certainly become possible at one moment. There are quite some possibilities in this regard.
I have been looking for this feature in a robo advisors but so far have not found it, what are the chances of having something similar invested. IMHO, This will take automatic investing in stocks to the next level. Let me explain:
I would like to invest a monthly sum in a set of stocks and ETFs, while paying a very low fee as a percentage of my investment (rather than a fixed fee) – most robo advisors can do this. However I would like it to work slightly differently : I would like to deposit a fixed amount in my robo advisor account every month, but then modify my investment amount for either the whole portfolio or individual etfs/stocks according to rules I set. For example the investment amount would go up or down according to a global indicator/s for example: “Market Cap to GDP” (Buffett Indicator) or individual stock indicator such as the distance between the current prce and the 52 week high. What do you think about this idea?
An additional feature which is realted to the above but not connected would be to have more granular control, for example : if an ETF drops by x % or increases by x% in x days, weeks or months then buy or sell this that ETF according to the rules set by the user.
Good thoughts! They are noted! 🙂
In general, your ideas reflect the need to personalise your investment strategies. In both cases, you want to apply some smart rules. We thought about that as well, and it will become possible at one point, however, this is not our first priority in the beginning as we need to focus.
What the idea shows is, that there are lots of different needs when it comes to self-directed investing. Hence, a smart investment service needs to be able to figure out these needs, and to provide intelligent answers, but in a simple way. This is the tricky part for us at the end of the day.
On a lighter note, I see you have offices both in London and in Brussels – Which one is your favourite and why ?
We really love London and have our headquarter there, but we keep the development activities in Brussels because of cost reasons. Hence, London is beautiful, but too expensive to enjoy, Brussels might be not as beautiful, but at least we have some money to enjoy.
