The health crisis has had a considerable impact on investors' financial portfolios. Financial advice and online savings startups, most of which were founded less than 5 years ago, have never been confronted with such a situation.
Numerous customers plunged into anxiety
The financial consequences of the coronavirus epidemic are causing concern among robo-advisor customers. Fintech Yomoni, which boasts 16,000 management mandates, says it is receiving a huge number of calls from worried users who want to change their investor profile to a more cautious one, with less exposure to equities. As a reminder, the life insurance specialist has selected 10 profiles, with varying degrees of exposure to risk, to meet the needs of all investors. Nevertheless, he advises us to "think long-term" and "not to try to outsmart the markets" by implementing a "methodical organization".
To reassure their customers, robo-advisors have decided to communicate transparently and urge caution.
Don't make hasty decisions
French start-up Nalo was the first to communicate on the subject of the Covid-19 crisis: "the best advice is to be patient". The startup advises its customers not to make hasty decisions, even if the temptation to sell now to reduce exposure or buy back later is great.
Keeping a cool head is also recommended by Advize, which offers the "Ma Sentinelle Vie" life insurance policy with unrestricted management, in which over 70% of users are invested in unit-linked products.
The robo-advisors' advice seems to have paid off. At Yomoni, almost 98% of the mandates under management have remained on the risk profile defined at the start of the investment. The mandates that have been modified are the most cautious. Investors who opted for this profile chose to further reduce equity risk. At Advize, only a few customers have asked to review their savings, while others have reduced their risk.
Robo-advisors build on their online platform
Against this backdrop of health crisis, fintechs are relying on their online platforms to ensure continuity of relations with their customers. Digital tools enable them not only to reassure customers, but also to manage their savings remotely.
Another advantage of robo-advisors is their ability to streamline investment decisions. In fact, an algorithm processes the data and proposes a tailor-made allocation for each customer. The combination of human advice and technology enables fintechs to stand out from other players in the sector at a time when France is in the throes of a financial crisis.