When publishing their wikifolios, a private trader may propose a performance fee of 5–30%. The company then offers a revenue share of up to 50% for the trader and charges the rest. For professional traders, wikifolio.com offers different sharing models that depend on whether the trader is a media company or an advisor, and on the number of assets the trader may achieve. Andreas remarks that the sharing models for professional traders are higher.
Partners and a custodian
Andreas explains that the company is currently focusing on the German, Austrian, and Swiss markets. The company partners with the Stuttgart Stock Exchange (Börse Stuttgart), the leading European market stock exchange for private investors. All investable wikifolios are listed in its Euwax segment, and almost all banks in the market are connected to Euwax; this enables wikifolio.com’s customers to invest in wikifolios.
Another partner is Lang & Schwarz, the issuer and market maker for wikifolio certificates:
“A Dusseldorf-based company called Lang & Schwarz is doing the lead framework, the structuring, and also the market-making of our products.”
wikifolio ETPs are collateralized. For this purpose, the equivalent value of the investments in the collateralized securities is deposited in whole or in part with the selected custodians.
Orientation instead of advice
The wikifolio.com platform is not a robo-advisor. The platform does not provide advice, as explained by Andreas:
“We are execution only. We show what others are doing and customers choose what they want to have. There is orientation for the investors, but there is no advice involved.”
Andreas is sure that this approach is the reason why a number of wealth-management companies, such as online stock brokers, prefer to cooperate with wikifolio.com:
“They don’t want to provide advice, but they want to provide some orientation to get more active customers. From an online stocks broker[’s] perspective, we are a way to activate their customers.”
wikifolio’s traders also provide seminars and interact with their customers to help them understand what the traders are doing.