Private Wealth Management: Last to Catch the Technology Train

From sending a letter, buying a train ticket, to ordering pizza or renting a car, technology has made its way into our lives. It has become clear to everyone by now that as long as it will make our lives easier, every process will soon be automated. The financial world is also moving in this direction, and at StoneCap we are part of this ride.

Is less human intervention better?

Digitizing and automatizing processes may sound to some of us worryingly a lot like heading towards a world of robots. Often people express concerns about the society being dehumanised. The concern is legitimate. Science Fiction movies like “A.I.“, „I, Robot”, or „Ex Machina“ depict a reality where robots take over the world that created them. However, to a large extent in reality we are privileged to live in a market economy, so these services are rarely forced upon us, but in fact they are supplied to us in response to our demand.

Let’s take the examples above. Online communication has brought significant improvements to our lives. Could you nowadays imagine writing letters to your family in Switzerland or your friends abroad, buying a stamp, and mailing the envelope, on a regular basis? Writing an email instead improved this process and made everyone’s life easier. It often happens that we need to travel somewhere, so we time our arrival at the train station 10 minutes before the train departure, only to discover there is a long queue at the ticket office; so we either miss the train or board and pay a fine. Since 2010 in Switzerland we can buy that train ticket on any smartphone. This saves us time and money. We are more efficient with technology. We can spend more resources on things that we like.

Private wealth management should be no exception

In the world we just described, where technology enhances life quality, an industry with so much at stake like private wealth management should stay on top of such advances. And yet, this service remains cluttered with bureaucracy, opaque and – to a certain extent – inaccessible. At StoneCap we are bringing light to this picture by introducing smart investing. Through the use of the so-called robo-advisor, we offer algorithm-driven wealth management services to practically everyone. It takes 3 minutes to fill out an online questionnaire and receive a portfolio at a risk level you are comfortable with, then we open your account and your wealth is taken care of. Compared to the standard 1.5-3% annual fee, we only charge 1% (and no hidden fees like the often-obscured transaction-, exchange rate-, or instrument fee). For this price, we achieve the same or even better portfolio performance as a hand-picked asset allocation. Nobel prize-winning finance scholars have made sure of that (you can read more about this in our upcoming blog post “Capital Asset Pricing Model – the Robot behind your Wealth”). With all these advantages, there is no doubt that technology will become the dominant driver of investment in the near future.

Many aspects of life are best left unchanged. No automatization can replace interactions with family, snorkelling with turtles or sharing a fondue with friends in a ski hut. But in some cases, technology undeniably makes our lives easier. And when it comes to private wealth management, StoneCap offers a smart, safe, and simple solution.