Germany’s federal financial supervisory authority Bafin, has granted a portfolio management licence to British social trading platform ayondo, which will come into effect as from 1 September 2017.
It will make ayondo the first company to provide social trading services under a portfolio management licence. With the licence, ayondo’s aims to render possible the match of social trading with its clients’ personal investment objectives. including their risk preferences.
Robert Lempka, CEO at ayondo, said: “We put customer experience at the heart of all our business activities. In collaboration with, and in consideration of the Bafin guidelines, we have taken traditional portfolio management and adapted it to the needs of today. The development is hugely important for ayondo and marks a major milestone for the fintech industry.”
The company also highlighted that the activation of the licence aims to further enhance the security of customers’ assets.
The portfolio management licence means followers can match a Top Trader’s risk parameters to their own risk profile. Once they have decided which level of risk they are comfortable with, they are notified if one of their chosen Top Traders deviates from this.
In addition to the current Top Trader remuneration model, ayondo is also offering a new performance-based remuneration. Similar to the model used in asset management, this will remunerate Top Traders based on each follower’s performance as well as a share of a fixed management fee. The aim of this new model is to broaden the range of Top Traders trading buy-and-hold strategies for followers.
Lempka added: “Here again, we have taken the traditional methods of portfolio management and adopted them to today’s customer needs, by introducing a new system whereby the Top Traders’ performance-based fee only applies if the individual client makes gains.”