What kind of times were those when financial provision consisted of filling your own children’s savings account. Small and large amounts from parents and grandparents were parked on it, and the interest rates, which were comparatively high at the time, seemed to take care of the rest. Inflation was already gnawing at the savings pot back then, but at least on paper it looked as if the money would just keep growing all by itself.
If you then drop by your childhood bank years later to invest a little more money, you may have a similar problem: advisors suggest building savings contracts, but because of the non-existent interest rates they are about as profitable as a savings book and quite pointless for the person , who will not build.
It is a blessing in this respect that nowadays you no longer have to rely on the advice of individual advisors: the offers of different banks can now be easily compared with just a few clicks. There are also dozens of apps that can be used to control, categorize and organize your own finances. And with the so-called smart brokers, the stock market has even moved into your pocket: Shares and other securities can be traded around the clock.
Some providers go even further, suggesting ready-made portfolios to their users, depending on their risk tolerance. The message: You no longer need to worry about finances, you have the clever app. The sometimes brightly colored designs reinforce the impression that dealing with finances is child’s play. In fact, that’s the case with many apps, technically speaking. But therein lies a danger – one greater than the zero interest rates of traditional banking offerings.
In order to be able to select the right apps and use them sensibly, a certain amount of knowledge is required. If you don’t learn this, you have to blindly rely on the advice of the digital helpers – and you’re not necessarily in a better position than an unsuspecting bank customer who puts his financial provision in the hands of some advisor.
This does not necessarily have to have serious consequences. Saving on unfavorable terms is still better than not saving at all. For example, with a so-called robo-advisor that automatically puts together a portfolio of stocks, bonds and commodities for customers. Incidentally, these supposedly clever algorithms bring an investor less return on average than the broadly diversified, balanced – and often cheaper – portfolio.
No app in the world can inform you about risks and opportunities for you
But it can also go really wrong if investors overestimate themselves and carelessly invest their money in risky securities via an app. So-called neo-brokers suggest that anyone can become a stock market expert overnight. They entice you with the opportunity to invest in cryptocurrencies and derivatives at high risk and thus make high profits quickly.
But investing is not a game. Existence does not have to be at stake, but for many it is private old-age provision. Therefore, everyone should put themselves in a position to separate serious from dubious investment strategies and to be able to select the right offers for themselves. The bad news is: No app in the world can do that for you.
The good news is: it’s not that difficult. There are now a number of easily accessible sources of information online that translate the financial jargon into simple German and clearly explain complex relationships. Of course, caution is also required here: not every self-proclaimed expert is one – just think of the so-called crash prophets, who blabber about the imminent collapse of the financial system with brazen vehemence, only to sell their own supposedly safe but completely overpriced investment products the next moment apply.
As with any research, it is important to find out: Who has what motivation for informing you? Who might get a commission for their tips – or is comparatively independent? Whether daily newspapers, Stiftung Finanztest or even the bank advisor: in the end it’s a bit like the investment itself: the broader you position yourself, the safer you are.