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Robo-Advisor
A digital wealth-management service that uses standardised risk profiles to build an ETF portfolio automatically, rebalancing and tax-optimising it on a continuous basis — without a human adviser.
What a robo-advisor is
A robo-advisor is a digital wealth-management service that uses standardised risk profiles to build a portfolio — usually from ETFs, more rarely from single stocks — and then automatically rebalances and tax-optimises it. Instead of a personal adviser, an algorithm walks the investor through an online questionnaire, scores risk tolerance and investment horizon, and maps the result to a model strategy.
Legally, robo-advisors operate either as portfolio managers licensed under Austria's Wertpapieraufsichtsgesetz (WAG 2018), as investment advisers or as investment intermediaries with a lighter regulatory duty. The distinction matters: only a fully licensed portfolio manager can execute purchases and sales on the investor's behalf at its own discretion.
Providers in the DACH region
The Austrian market is small. The main names are:
- Savity (Vienna) — full portfolio management under WAG 2018, €500 minimum, fee 0.99-1.2% per year all-in.
- Carl (Vienna) — focused on the self-employed and estate planning.
- Scalable Capital (Munich) — the largest European provider, active in Austria via branch, fee 0.75% per year plus the TER of the underlying ETFs.
The German market is dominated by Scalable, Quirion, Whitebox and VisualVest. The US leader Betterment is not active in the DACH region.
What drives the algorithm
Behind the marketing language sit mostly classic constructs from modern portfolio theory: mean-variance optimisation in the Markowitz tradition, Black-Litterman models for expected returns, or simply a lifecycle approach in which the equity share declines with age. Most providers offer five to ten risk classes with equity shares between 20% and 100%.
Rebalancing is either time-based (e.g. quarterly) or threshold-based (triggered when allocations drift more than 5% from target). Studies suggest that threshold-based rebalancing can deliver an extra 0.1-0.3% per year over rigid time intervals in the long run.
Cost reality
The effective all-in cost of a robo-advisor typically sits between 0.8% and 1.5% per year of assets — management fee plus the TER of the underlying ETFs. A self-built ETF portfolio comes in at 0.1-0.3%, much cheaper. The premium pays for automatic rebalancing, tax optimisation and, above all, the avoidance of emotional mistakes — which is what generates the biggest real-world return uplift for many retail investors.