Summary of the "Groupe de Reflexion Bancaire" held in Geneva by Chappuis Halder & Co with the participation of SwissQuote, Yomoni and InvestGlass

1. Robo-Advisors : Wealth Management’s evolution or revolution?
Geneva, November 25th 2015

2. 2
A way to understand the Robo-Advisors is
to partner-up with them. Indeed it could
generate new ways to work more
efficiently. For example is Fidelity teaming-
up with Betterment to offer an
Institutional version of Betterment to its
independent financial advisors.
The Robo-Advisors phenomenon increases in an undeniable way with vertical integration
strategies brought by big US asset managers on the mass-market
AuM still marginal, but an exceptional growth
Rest of the world
USA
87%
Total AuM
USD21 Billion
13%
Rest of the
Robo-Advisors
12%
8%
6%
0,02%
74%
Global Assets Under
Management in 2014:
USD72 Trillion
99,98% AuM by traditional advisors
AuM by Robot-Advisor
Vertical Integration Strategies
Asset Managers are acquiring and/or
launching their own automated advisor
platforms. Vanguard, for example, officially
launched its own on May 2015 after 2
years of Beta testing. It now has USD17bn
in AuM (of which USD10bn were
transferred from their existing customers).
Commercial
PartnershipInvestmentGreenfield
Asset Managers are investing in existing
Robo-Advisors in order to leverage this
opportunity. BlackRock, for example,
invested into Personal Capital and
Schroders invested into Nutmeg.
Integration
June-12 June-15
Growth trend of the
3 main players

3. 3
Avg. AuM /
customers
No. of customers
Self-contained
Robo-Advisor
8
8
USD 250K
USD 500K
USD 750K
0
USD 1m
Hybrid
Robo-Advisor
Sophisticated
management +
personalized
advice
Creation of Robo-Advisor as part of the digital
strategy in conquest or in servicing
Robo-Advisors deployment to Back Office as an
support to RM
Support to
RM
Administrative tasks completion,
especially compliance (client onboarding
/KYC)
Market opportunities screening tenfold
increased/benchmarking
Robo-Advisors cover two different realities in the market: B2C vs. B2B
Automated alerts
Push information for clients

4. 4
Speakers
LaunchingCareerDelegatesCompany
Dr. Serge Kassibrakis
M. Alexandre Gaillard
M. Mourtaza Asad-Syed
CEO and founder of
InvestGlass, Alexandre is
also the Vice-President and
founder of Swissfinte.ch.
He has more than 12 years
of experience in
Investment.
Founder of Yomoni,
Mourtaza has approximately
20 years of experience in
Financial markets and
consulting, especially with
SocGen, JPMorgan and
McKinsey.
Working for Swissquote
since 2001, Serge is head of
the Quantitative Assets
Management department
and a member of
Swissquote Bank’s
Executive.
2010
2014
2013

5. 5
Swissquote’s ePrivate Banking introduction
Swissquote’s ePrivate Banking solution is a platform made for customers whom are interested in a more accessible electronic
Private Banking. The platform is very strongly configurable and offers great level of freedom to customers.
All the on boarding process is done
electronically. To set up an
account, users must, as a first step,
fill out a form that will define their
risk profile and adapt the
management accordingly, like by
limiting the market risk accessible
to the client if needed.
After this step’s conclusion, the user needs to choose the market risk that he/she
wishes to apply to his/her strategy. According to the answers generated during the on
boarding phase, an alert indicating that the factor is located too close to the set risk
profile’s limit, can be sent to the user. The client can even have his/her access to
market risks that are too important removed.
The service enabling now multi-
asset classes management Asset
Managers can use the Robo-
Advisor as a support in their
recommendation, particularly
introducing their market views.
All the risk management, the
trade order and the monitoring
being delegated to the
algorithms.
Les tarifs sont compris entre
0.9% à 1.2% du patrimoine sous
gestion sur une année. Tout le
processus de onboarding se fait
de manière électronique.
A back-test page enables each
user to visualise and analyse their
strategy behaviour according to
the market conditions and
especially compare strategies.
To set up an account, clients
must have at least CHF 20,000.
At present, 1,500 ePrivate
Banking accounts have been
opened, representing an AuM of
approximately CHF 70M.
A “granular” universe is made available: the available detail of the universe increases
based on the assets under management. Small portfolios have access to a global EFT
universe representing different asset classes, while the biggest portfolios can directly
be invested in actions for the Equity class or in more specialized ETF’s for the Fixed
Income class.
The origin of the Swissquote
ePrivate Banking goes back to
2010. The programme was
originally only capable of an
automated asset portfolios
management. The objective of the
investment strategy was to
maintain the client’s market risk. If
the market suffered a shock and a
difference between the client’s risk
profile and his/her portfolio risk
prevailed, the algorithm would
reallocate automatically the
portfolio.

6. 6
InvestGlass’ introduction
The “Adjust” part allows to
visualize to which extent the
investments are far from the
client’s profile and to decide
upon the asset’s eligibility
InvestGlass’ objective is to offer to everyone a personalized service taking into account preferences for each client.
Every client can have specific
preferences in terms of
investment: thus, the
programme takes into account
this element in its investment
recommendations. It also
recommends other investments;
this being based on a similar
system to that of Netflix: “If you
liked this, these suggestions
might interest you as well.”
InvestGlass focuses on 3
problematics
The platform has 7 main
functions
The platform is a true support to
Asset Managers
Any modification, on labelling for example, is
stored by the programme

7. 7
Yomoni’s introduction
2014
The arrival of Yomoni on the
market breaks the traditional
value chain. Normally, an asset
manager cannot afford to spend
too much time on small
portfolios (max. EUR 100,000),
for profitability issues. Yomoni
makes Private Banking accessible
to everyone and suggests a
limited offer to its clients.
Yomoni targets the French mass-
market with clients disposing of a
portfolio between EUR 1,000 and
EUR 100,000. The platform
enables to manage a large asset
volume while mobilizing only a
few number of people.
The whole subscription process is
done digitally. A profile is created in
approximatively 15 minutes. The
French tax system is commonly
complex, however the platform offers
much simplicity to clients.
The price is transparent and
non-retroactive.
The platform focuses on user
experience. Easy to use, the
process consists of two parts:
first an educational part for the
user and the second part on
profiling in order to identify the
adequate risk profile for each
client.
All management is done in a
discretionary manner. Yomoni is
totally aware that it couldn’t
copy the relation between
banker and client: this is why
the platform focuses on other
aspects and offers its added-
value elsewhere.
The platform’s goal is to “commoditize” management and to provide “all in one” mandates. For an Asset Manager, this will enable
to outsource the part relating to the asset management and to focus on relation with clients.
All-included, the fee is at an annual rate of
1.6% of the total of AuM that breaks down
in the following way:
 0.3% of commission for ETF
 0.7% for management commissions
 0.6% for life insurance package

8. 8
Co-existence between
Robo-Advisor and RM,
what interactions in Front
Office?
Which major issues is the market currently addressing?
3
Robo-Advisor and the
bank’s business model, a
solution ALSO for Back
Office?
Robo-Advisors, what are
the concrete results and
how to look at their
performance objectively?
Is there a more “palatable”
client profile to Robo-
Advisory (young, senior,
new investors, asset
traders etc…)?
1
4
2

9. 9
Robo-Advisors,
what are the concrete results and how to
look at their performance objectively?
Business Model profitability
Betterment & Wealthfront, 4.2% average return
on investment in 2014
The Robo-Advisors represent a 0.003%
market share of the wealth
management industry
Client satisfaction?
Question 1
Exit barriers?

10. 10
The performance of the portfolio managed by Robo-Advisors depends on the
risk level chosen by the clients
The Robo-Advisor is free of emotion, but the interaction with the client remains central, which creates a link.
The market risk is a dynamic and
ongoing variable. That is why the
new reports offered by these
technologies represent
performances and risks along a time
axis. Without any doubt, this is
consistent with the legal obligations
that push portfolio management to
be more and more transparent.
It is difficult to compare
performances issued from different
strategies in terms of risk of market
views and market timing. However,
we can notice that they are
encouraging.
What really matters with Robo-
Advisors, is the possibility given to
the public to use programs for
quantitative analysis. We are living
today an algorithmic revolution and
the Robo-Advisors enable retail
clients to access directly to
sophisticated algorithms, formerly
made exclusive for the elite. There’s
also a revolution at the Big Data
level. These two elements combined
multiply the opportunities in the
management field.

11. 11
The most difficult task in the wealth management field is to issue the good information at the right time. Robo-Advisors fill this
gap.
The value proposition consists in
identifying where the value loss
is situated for the client. Over
the past 30 years, the S&P index
has increased at an 8% average
annual rate while the average
investor benefited only from an
approximate 4% average annual
rate during the same period.
The goal is, thus, to understand
where this difference comes
from while the portfolios try to
do as well as the market (as
opposed to try to outperform
the market).
A better performance involves 3 steps:
 Management mandate, based on the risk profile established when
the client filled the form
 Reduced costs
 Indexation more efficient than the management with assets
In general, the client has a bad
performance because the timing
wasn’t optimal (i.e. a market exit
at the wrong time). The platform
tries to protect the client while
preventing exit from positions.
The goal here isn’t to have a
paternalistic relationship with
the client but rather to restrict
his/her choices.
One cannot judge Yomoni’s
performance yet as the platform
has been launched only
recently.
The criteria for success are
certainly ambitious but they
don’t aim to beat the market
nor the “Hedge Funds for
everyone”.
The objective is not to do better than the market, but to make sure that the clients
can do just as well while avoiding any loss.

12. 12
Is there a more “palatable” client profile to
Robo-Advisory?
Millennials?
Technophiles? Baby Boomers?
HNWI?
Question 2
Institutional clients?Entrepreneurs?
Desire to benefit from automated investments:
 HNWIs < 45 years : 67%
 HNWIs > 45 years : 38%
Source: World Wealth Report 2014

13. 13
Each portfolio must be personalized as a consequence of the attributes to
every person
The majority of the ePrivate
Banking comes from the trading
platform SwissQuote. The
others are simply a new
customer base.
By observing the age pyramid of
the ePrivate Banking customers,
we can see a large proportion of
seniors. It is not so surprising…
these people were able to
accumulate capital during their
whole life: it is at this point that
they need to manage it.
The ePrivate Banking platform analyses the risk profile of each client and allows it to compare this to the rest of the population
in order to establish the portfolio objective risk.

14. 14
The clients conventional segmentation relative to their age bracket is no longer
fully relevant
The behavior toward
investment, or even technology,
can vary within the same
segment.
A segmentation more appropriate in the case of Robo-Advisors should follow the archetypes of Jung and focus on the user
behavior.

15. 15
The most important segmentation criteria is the attitude toward investment
The client’s risk profile is
established from the start. For
each risk profile corresponds a
different portfolio. The risk
profile is nevertheless totally
dependent on the events during
the client’s life. A single young
executive will not have the same
risk profile (and subsequently
the same portfolio) as a
pensioner. The risk profile as
well as the portfolios are
scalable and will not stay the
same eternally.
Yomoni’s target is the “mass market”, so far without access to investment consulting.
The people just looking for
performance are not the main
target. There are truly only two
reasons for changing profile: the
market has changed or the life
situation of the client has
changed.

16. 16
Co-existence between Robo-Advisor and
RM, what interactions in Front Office?
Who gives directions to
Robo-Advisors?
Different interaction with Robo-Advisors
according to different types of managers?
New market opportunities
Help or competition?
Question 3
Combine the best of both services?
Managers mistrust?
Allow the RM to focus on the relational
aspect

17. 17
Robo-Advisor and the bank’s business model,
a solution ALSO for Back Office?
Compliance monitoring?
Automated trade orders?
Question 4
Digital onboarding?
ETFs? Robo-Advisors, limited range of financial
products?
Back-office consistency need
Data availability

18. 18
Question 3 and 4 – Co-existence between Robo-Advisor and RM, what interactions in Front office?
Which opportunities for Back Office ?
InvestGlass
InvestGlass does not undermine bankers but quite the contrary to help them. Especially, the platform can ease complications coming from the
multitude of new regulatory requirements that will come into force over the next few years, like for example the MIFID 2.
InvestGlass seeks to change the nature of the relationship between the client and his/her adviser which is actually made of 80% administrative and
20% human to 20% administrative and 80% human.
SwissQuote believes in the benefits of the relationship between the Asset Manager and Robo-Advisors because the solution would allow the advisor
to focus only on the relationship with the client and let the engine take care of the heavy part of the portfolio management.
SwissQuote
Yomoni aims at “commoditize” the portfolio management and make it more straightforward. However, we are aware that for high-net-worth wealth
problems become more complicated and require an entry into a business relation and a more sophisticated planning, which is not Yomoni’s priority
so far.
Yomoni