Novofina, a European robo-advise provider, is launching its 'Neue Finanzen' service in the UK, touting significant returns through a tailored algorithm that uses artificial intelligence.

The wealth management provider is launching two portfolios – 7plus and 20plus, which target seven percent and 20 percent annual returns respectively. The returns are based upon an algorithm, with the proposed returns being a result of past simulations that have been back tested over 10 years.

The minimum entry requirement for the service is £30,000 and Novofina claims that there are no management or performance fees. Harald Helnwein, founder at Novafina, says: “We make our money through execution, in the exercise of entering or exiting positions through our trading platform.” The execution fee for Novofina’s service is $0.015 per share.

Helnwein adds that clients using the new service can opt out at any time and also have the option of pausing the service if they need access to capital or if they feel that financial markets are too volatile.

Helnwein  says: “All the successful and very large investment houses, hedge funds, use almost on an exclusive basis automated trading algorithms. By doing so, the human factor is taken out of the increasingly difficult financial decisions. Computers can analyse thousands of stocks within a second and make trading decisions in milliseconds. This is what Novofina makes directly accessible to clients.” 

Novofina’s claims of such high returns have come under scrutiny from the asset management industry, deeming the proposed performance to be unrealistic. However, a recent Deloitte report has credited the service, suggesting that Novafina’s use of self-learning artificial intelligence represents the “fourth generation” of robo-advisors. The report notes:

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“Novofina may prove to be one of these next level Robo-Advisors providing algorithm-based Wealth Management solutions which scan single client portfolios and open/close positions without human interaction following self-developed algorithms.”


Source: Deloitte