Descartes Finance is the last independent robo-adviser of Switzerland, after True Wealth entered into a cooperation agreement with BLKB. In an interview founder and CEO Adriano B. Lucatelli explains his plans.
Mister Lucatelli, True Wealth is going together with Basellandschaftliche Kantonalbank (BLKB). Descartes Finance is now the last independent robo-adviser of Switzerland. For how much longer?
We want to remain independent. The idea of Descartes Finance – not dissimilar to Uber or Airbnb – is to broker investment strategies and depository banks to clients via a platform and this requires us to remain independent. We curate our offering, which means that a certain distance is beneficial.
I also expect new and exciting robo-advisers to enter the market soon. It is important that different players establish themselves and take a hold.
Descartes Finance is new. What's your development plan?
We have had a soft launch in spring and are now approaching interested parties. We have different activities in mind, which we will implement step by step. We have no pressure from the cost side and will go forward focussed.
Isn't the Swiss market far too small in principal for independent robo-advisers to generate enough volume? The example of True Wealth has surely shown as much?
The number of deciders isn't great in Switzerland, that's for sure, but the private banking industry is. I also take the pension fund market into account, which is getting ever bigger. We have concrete ideals how to communicate with this industry in the near future.
Could you elaborate in more detail?
Today, this market is primarily served with expensive 3a-funds and the choice of vested benefits accounts for the non-obligatory business remains small.
For digital providers such as Descartes Finance there is a great potential because the money can be invested semi-passively over several years in a cost-efficient way. You don't need a physical infrastructure for that purpose. You need intelligent and cost-efficient solution – which we have on offer.
Why do you believe Descartes Finance will be successful?
I'm convinced that we offer investors access to a strategy otherwise not available to them. We also use individual equities depending on the strategy. The customer doesn't simply get a pre-fabricated strategy fund put into his deposit.
Our company isn't just about technology experts. Descartes Finance also sports many decades of financial-market experience. This is important if you want to detect new customer needs and to service them.
What's your business plan look like?
We want to be the leading independent robo-adviser of Switzerland. Our plan is calibrated in a way that we will soon reach scaleability.
When will you be profitable?
We are a private company and don't disclose our plans in detail.
Who are the driving forces behind Descartes Finance?
Apart from myself as the biggest shareholder, we have private citizens who are «skin in the game».
Descartes Finance has a selection of investment strategies by different companies on offer, from UBS, iShares of Blackrock, Vontobel, OLZ & Partners or Lakefield Partners. Are these companies invested in Descartes?
No, because we couldn't remain independent, if our product partners were to be financially invested in our company. Our business model shows that you can successfully cooperate with big, established players without a financial participation.
Will you have further partners?
I wish that further top asset managers will join our platform. All providers of evidence-based or smart-beta strategies are interesting for us. We will however never be a warehouse where everything is available. We see ourselves as curators of selected investment strategies.
You claim to offer strategies proven by science. In doing so, you don't really cater for small investors. Who are you aiming at?
Investing in a scientifically proven fashion doesn't mean that your investors need a profound knowledge about investments or that you have to be smarter than the market. We want investors who are interested in cost-efficient, diversified and long-term strategies.
Investors are welcome starting from 50,000 Swiss francs. The reason why we don't offer our services to people with 5,000 or 10,000 francs to invest is that an efficient implementation of the strategy is not possible at that level.
Which are you next steps?
It is possible that we will offer the platform to interested asset managers or family offices, which would be able to integrate their own investement strategy.
Adriano B. Lucatelli, 50, founded Zug-based Descartes Finance in 2015 and today acts as its CEO. He studied economics and international relations at the University of Nevada (BA) and at the London School of Economics (Msc). Lucatelli started his career at Credit Suisse in 1994. He was a managing director and member of the management committee of UBS from 2002 to 2009. Lucatelli also teaches at the University of Zurich and is the president of the readers council of «Neue Zuercher Zeitung».
