Swiss Roboadvisor True Wealth Finally Offers also a Pillar 3a Solution

Swiss Roboadvisor True Wealth Finally Offers also a Pillar 3a Solution

by November 8, 2022

Saving in Pillar 3a becomes an integrated part of wealth management within True Wealth.

Since being founded in late 2014, True Wealth has grown to become an established wealth manager in Switzerland in just eight years. The fintech company currently manages assets for around 12’500 clients, while the volume of invested assets is around CHF 800 million. In 2021, the assets under management doubled and the number of clients increased by around 80 percent.

The company’s founders, Oliver Herren and Felix Niederer, set new standards in online wealth management from the very beginning. On the one hand, with the now award-winning technology, which makes wealth management simple, direct, understandable and self-determined. On the other hand, through the underlying idea of True Wealth, that clients benefit to the maximum: Thanks to digitalisation and a high degree of automation, costs and fees are able to be kept very low.

Private retirement savings newly integrated

True Wealth is now consistently pursuing this path. With immediate effect, private retirement savings, which are possible in Switzerland on a tax-optimised basis with the so-called Pillar 3a, will be fully integrated into asset management. At True Wealth this is free of charge: There are no management fees for clients. Moreover, the interest rate of 1.0 percent on the cash portion of the Pillar 3a is unrivalled.

Felix Niederer

Felix Niederer

Felix Niederer, founder and CEO of True Wealth:

«Payments into the Pillar 3a can be deducted from taxable income. The state thus forgoes tax revenue in order to provide an incentive for free pension provision. It is important that this money can go directly to the savers and not into the pockets of the finance and insurance industry.»

Back to savings interest

At True Wealth, there is no custody fee, no postage and no service fee. Portfolio rebalancing, which is important for diversification, is also free of fees. Due to the technology and investment approach, there are no conflicts of interest in investment decisions at True Wealth. As always, asset management is transparent and independent in Pillar 3a.

Oliver Herren

Oliver Herren

Oliver Herren, founder of True Wealth:

«Our goal is to enable our clients to build up their assets over the long term; thanks to our technology, this is possible in an extremely cost-effective manner. With Pillar 3a, we go one step further: We offer private retirement planning free of charge. And saving is worthwhile again because our customers benefit from an interest rate that none of our competitors can match.»

The implementation is done with cost-efficient ETFs and index funds.

New simple approach within True Wealth

Until now, saving in Pillar 3a was associated with unnecessary effort. It required a separate 3a retirement savings account, a special risk profiling for Pillar 3a, a separate investment strategy, a separate software application – and savers would have to take care of the annual deposits and deal with the issue of tax. All of this is no longer necessary with True Wealth’s 3a solution, which is integrated into its holistic asset management. Clients will always automatically benefit from the annual 3a tax advantage.

Private retirement planning becomes simple and maximises time savings. True Wealth clients configure the 3a portion within their asset management individually. When the Pillar 3a offer is activated, they automatically receive a set of five retirement savings accounts. With ongoing payments, the accounts are invested in stages over the years to ensure maximum flexibility when withdrawing capital at a later stage. Even when capital is transferred free of charge from other providers, investments are made in a separate retirement account to maintain flexibility for staggered withdrawals.

True Wealth’s algorithm ensures that the securities are distributed as evenly as possible across the various accounts. This results in significant tax optimisation at the time of retirement: Accounts can be closed in a staggered manner and spreading the retirement assets often allows the burden of progressive capital payment tax to be significantly reduced.

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