“We are the first firm to bring robo-advising to Israel,” declares Kinneret Farzon, CEO of Fjord Investments. In order to understand the significance of this statement, one must first understand the meaning of the term and the background of the person who is leading this revolutionary financial service in Israel.
Robo-advising is a digital platform that provides algorithm-driven financial planning services with little or no human supervision. An online ‘advisor’ asks questions about the prospective investor’s financial situation and then, using the answers provided, offers financial advice and invests the customer’s money. Robo-advising is easy to use and has lower fees than more traditional investment services.
Robo-advising has become quite popular in the United States, Europe and Asia and has become a $7 trillion market. By 2025, it is estimated that the robo-advising market will grow to $20 trillion.
Kinneret Farzon is a licensed investment portfolio manager through the Israeli Securities Authority, with more than thirteen years of experience in the capital markets, including working at major investment firms such as Meitav Dash Investments and Psagot Investment House. She has worked in the establishment and operation of many financial ventures. Farzon has been joined at Fjord by such distinguished financial personalities as Ronen Torem, former CEO of Tower Capital Markets; Uziel Danino, a member and director of Rosario Capital, an underwriting company; and Ronen Ginaton, a former vice president and management leader at top companies in the industry.
Farzon explains that robo-advising is not only simple and easy but makes the investment world accessible to the average small investor, who doesn’t have access to banks and large investment houses. “Big investment houses don’t pay attention to small investors,” she explains. Robo-advising enables small investors to receive the same level of services, digitally, in a quick and simple way that enables them to build their own financial portfolio.
While most of the world has adopted robo-advising, Israel’s fintech market has not yet caught on, and Fjord is the first company to offer this service in Israel. Farzon explains that Fjord’s robo-advisor service provides its advice to clients based on the responses to questions provided by the client regarding the level of financial risk they want to expose themselves to, specific information about their financial resources, and an analysis of big data, to provide recommendations. At the conclusion of the sign-up process, Fjord personnel speak to clients by phone to confirm their agreement. Farzon adds that human advisors at Fjord are available for phone consultation should clients have specific questions. She emphasizes that the money is always in the hands of the client, who may choose to withdraw it at any time.
Fjord’s robo-advising investment is designed for people who don’t have the time or inclination to deal with their investments in a long, drawn-out process and who are comfortable with using digital investment services. In today’s corona-fueled digital age, where virtual online services have supplanted in-person engagement, robo-advising is efficient and cost-effective.
Another ground-breaking feature of Fjord for many of our readers, Farzon explains, is that Fjord’s investment services are especially useful for American citizens living in Israel. US tax rules discourage investments in many popular Israeli investments, such as mutual funds, exchange traded funds (ETF) and Kupot Gemel Lehashkaa because they are considered passive foreign investments (PFIC). Fjord Investments, on the other hand, she notes, invests in US exchange traded funds, which are allowed by the IRS. “This is a great investment solution for Americans here,” she says, “and to this end we have associated ourselves with two prominent financial advisers for US-citizens, Rifka Lebowitz, who runs the ‘Living Financially Smarter in Israel’ Facebook group with over 35,000 members, and Gadi Last of IAL.”
Farzon explains that Fjord has grown over the past two years during the pandemic. “Since we are a digital company, people were able to invest with us while they were closed up in their homes.” She expects investments to continue and mentions that young people, in particular, who are comfortable with online engagement, prefer to invest online without speaking to advisors. Investment accounts can be opened for as little as NIS 10,000, she adds.
What are Fjord’s plans for the future? “Our goal,” says Kinneret Farzon, “is to get to as many communities as possible. We will continue towards our goal to reach those in Israel and around the world who are not regarded by the banks and investment houses. Some investment houses in Israel will not provide financial advice to anyone with less than NIS 250k to invest, and some banks have a minimum amount of NIS 400k,” she says. Fjord Investments is based in Ramat Gan, and its team of programmers, advisors and financial professionals are well-equipped to propel the world of robo-investing in Israel.
This article is taken from The Jerusalem Post Israel Technology and Innovation Magazine 2022. To read the entire magazine, click here.
This article was written in cooperation with Fjord Investments