Category: Blog Articles

Did you know that we are the first fintech in Switzerland with 35 years of financial advisory experience? This is possible thanks to the cooperation with the multi-family office “Swiss 5 Group”. This gives Everon clients the best of both worlds: private banking including digital asset management via the app and customized investment strategies that are otherwise reserved for professional and institutional investors.

Until today, there was little overlap between utilizing a wealth management application and receiving guidance from a family office. While apps rely on automation and standard processes to keep costs as low as possible, the family office focuses on personal and tailored advice. Accordingly, the services and investment strategies of a family office have so far only been available to a very small and exclusive group of clients.

Democratization of private banking

We are now bringing these two approaches together for the first time as we democratize private banking by combining the best of both worlds. At Everon innovation meets tradition. Our customers can manage their assets completely independently and at attractive conditions via the app. At the same time, they have access to the tried-and-tested investment strategies that we have developed together with the Multi Family Office have developed.” Further services, which in our view still include personal consulting, can also be used if required.

This service is usually only available to family office customers.

Fintech with 35 years of investment experience

Our investment philosophy has existed and proven itself for 35 years and is continuously developed.  The strategic and tactical asset allocation is defined regularly and jointly. We also coordinate with the family office on the individual strategies within the respective asset classes. In addition to traditional asset classes such as bonds, equities, real estate, and commodities, Everon clients can also invest in private markets. 

We can also respond quickly and unbureaucratic to individual customer needs in all other asset classes: Thanks to our «Portfolio Management Engine» we are very flexible. This self-developed software generates, based on the wishes and requirements of the client and the parameters of the investment committee, individualized proposals for individual investments and entire portfolio structures.

The only fintech represented in the wealth management ranking: award-winning strategies for a target group that will no longer receive the advice it deserves from banks in the future

The fact that the jointly developed investment strategy works are shown by the asset management ranking published by Bilanz and firstfive In 2020, we made it into the top 5, and in 2021 we even made it to 1st place. 

Low margins, cost pressure, more demanding customers: Private banking is facing numerous challenges. However, as a provider, you should regard these developments as an opportunity, because this is how you can benefit from the digitalization of private banking.

Private banking has been a constantly growing and tremendously successful line of business for a long time. Since the turn of the millennium, things have looked different. Although assets under management have declined according to Deloitte continued to rise between 2000 and 2020 – by 60 percent but at the same time profitability fell by 40 percent. According to the experts at Deloitte, the provider’s business models are to blame for this development: They are outdated and increasingly fail to meet customers’ needs.

These needs have changed dramatically in recent years. As we have become accustomed to in other industries, banking transactions should be able to be carried out 24/7 and with little effort. The solutions must be state-of-the-art and include additional functions that not only look good but also offer added value. Thanks to the Internet, customers are also increasingly well informed. They compare the services and fees offered and (understandably) only want to pay for what they actually need.

Those who do not meet these demands will not be able to hold their own. Because while bank customers used to be very loyal, today they are more willing to change their banking relationship.

Not to do things by halves

The changes in private banking are so profound that it is not enough to digitize individual areas. Installing digital sales channels, such as an app, is the first step. However, to remain relevant in the future, providers must also digitize all processes from the ground up.

At the same time, it is important to maintain proven strengths such as discretion, quality, individual service, and independence. The latter, in particular, is central to private banking and allows clients to be served not by product salespeople, but by financial specialists. By advisors who earn not from product commissions, but from the growing wealth of their clients.

While many providers are still struggling with these developments and sticking to the existing business model, customers have become accustomed to the benefits of digital offerings. Not only because of the leaner fee structure but because they benefit in other ways as well. For example, in a Studie von Ernst & Young 57% of respondents say they make better investment decisions thanks to digital tools. Unsurprisingly, Millennials (78%) use the offering more than Generation X (59%) or Baby Boomers (42%). The Corona pandemic has further reinforced these developments, with more than half of respondents now relying even more heavily on digital tools.

Digital but still personal

However, the increased focus on digital offerings does not mean that people no longer play a role in private banking. The need for personal advice will continue to exist in the future, which is why hybrid business models have the best prospects. In these, all processes are digitalized, but it is still possible to speak to an advisor in person if necessary – for example, via video call.

The democratization of private banking not only benefits customers but also those providers who can meet the new demands. Thanks to competitive offerings, they are becoming attractive to more and more people and can expand their customer base. But unlike in the last 20 years, costs are no longer getting out of hand because the majority of processes are digitalized and cost-effective. Clever digitized private banking is therefore attractive for customers and providers alike.

Continue reading in our journal:

• More on Digital Wealth Management
• Background on the family office
• All about private financial planning

Current market situation

In the last few days, we have witnessed significant movements in the global capital markets. The main reasons are the recently announced interest rate hikes and the current geopolitical situation in the Ukraine.

In principle, raising interest rates is a sign that an economy is doing well. In the current case however, the interest rate hikes by various central banks are based on the fact that there is above-average inflation in many countries. On the one hand, this is due to the loose monetary policy of the central banks during the Corona crisis, and on the other hand to the disruption of international supply chains triggered by the Corona crisis. For example, a shortage of goods with a rising money supply leads to rising prices.

Higher interest rates mean higher financing costs for many companies. This particularly affects companies that still have to invest a lot of capital in their growth, so-called “growth” stocks. For this reason, these stocks that are being hit hardest by the current market correction. Another point that currently worries market participants is the uncertainty about the velocity and extent of the announced interest rate hikes.

At Everon, we are watching the markets closely and believe that market participants are currently overreacting, as economic data has been very positive, especially over the past year. To some extent, we can also assume that some players in the market now want to realize the extraordinary gains of the last stock market year and sell their positions. An interest rate hike is basically a normal process that was bound to happen again sooner or later. The low interest rate environment has already become normal for us from a psychological point of view.

Sell-off largely limited to equity markets

Looking at other markets, we can clearly see that the current situation is not comparable to the early 2020s. Credit spreads on corporate bonds remain unchanged at a low level. Credit spreads can be seen as the risk premium that companies have to pay on their debt financing to compensate lenders for the risk of default. This is a good indicator of the overall economic health of companies.

How Everon reacts to the current market situation

We have chosen not to hedge our portfolios, because it is very costly and we see limited benefit in doing so. Instead, we reallocate within the portfolio to more stable industries and prepare to take advantage of opportunities as they arise during the inevitable recovery phase. As it is scientifically proven that about 80% of the return is explained by the strategic asset allocation, we would like to stick to it. So far, this has paid off in the medium to long term.

Therefore, it is important to remain calm in this turbulent market phase and not to be unsettled by short-term losses. Corrections, such as those we are currently seeing, are completely normal, especially against the backdrop of the recent extremely positive stock market years. And these also have a decisive advantage: they are the best times to invest additional capital. As long as nothing has changed in your financial situation or your risk profile, we are still on track for the long term with your current strategy.