Partnership should enable professional investing

Crypto trading like the pros thanks to social trading? An alliance of the FELS Group, Bankhaus Scheich and Bankhaus von der Heydt wants to make this possible.

The Scheich bank, the Fels Group from Taunus and the von der Heydt bank in Munich are working together for a new three-party alliance, “Follow my Money”, in the crypto space to offer private customers trading in crypto currencies with immediate effect.

As a message from the Sheikh bank shows, the bank itself is given the role of contributing liquidity from larger crypto exchanges. In addition, Schleich enables customers to do OTC trading, which is normally not available to smaller investors. The Fels Group provides the platform behind “Follow my Money”. And finally, von der Heydt will take over the safe and free custody of the cryptocurrencies for users of the service. You can start trading with a minimum deposit of 100 euros.

On the website of “Follow my Money” it says:

Follow my Money is the first multibank platform with which you cover the important areas of successful, sustainable investment. Whichever investment goal you pursue, we have the right strategy for you – and we can bring you together with the right financial professional if you wish. Invest your money on a broad basis at top conditions. Or follow the recommendations of certified stock market experts free of charge. The combination of our offers combined in one app makes the difference.

Social trading

With “Follow my Money” customers have, among other things, the opportunity to follow “Star” traders, ie social trading. That’s why the platform was originally called “Follow my Trader”. Investors can link their portfolio to that of a trader. If the star trader makes a purchase or sale, the portfolio automatically reflects this transaction. Acting like the pros, made easy – theoretically.

Bankhaus Scheich describes who the star traders are in the press release as follows:

According to Jens Labusch (founder of the Fels Group), the “Star Traders” are semi-professional investors, some of whom are well-known in the trade scene and who have to show a proven track record. And not just on paper, but with your own money. Walter Peters, Robert Baumann and the Trading Brothers are currently there. With “Follow my Money” all Star Traders have to trade with their own money.

Other platforms also rely on social trading

In addition to “Follow my Money”, there are a number of other platforms that have recognized social trading as a lucrative opportunity. For example eToro or Naga. EToro, for example, is impressive testimony to the fact that social trading and online brokers offer a lot of potential. It was only in March that BTC-ECHO reported on eToro’s IPO. In 2020 alone, the social trading platform turned over over 605 million US dollars. The founder of the Fels Group states that the big difference between “Follow my Money” and other providers is that the “Star” traders carry out their transactions together with their followers.

In the “Follow my Money” user interface, investors can view costs and taxes in real time. The “Follow my Money” social trading service is financed through transaction fees. Each purchase / sale costs between 5 and 49 euros.

However, “Follow my Money” also offers customers the opportunity to invest independently in the financial and crypto markets. Trading costs of EUR 5.00 to EUR 7.50 should be incurred for shares, ETFs and certificates. If you want to buy or sell cryptocurrencies, it should even be possible to do so without commission.

However, in the “Follow my Money” price list, it is indicated that the purchase of crypto currencies requires at least a transaction amount of 100 euros.

Von der Heydt cooperates with Bipanda

Von der Heydt and Schleich also want to participate in the crypto boom and thus enable customers to increasingly trade in Bitcoin and Co. Because only on September 14th, von der Heydt announced a cooperation with the Unicorn Bitpanda on LinkedIn. Together, the companies want to bring the traditional monetary system and the new market for crypto currencies together.

Warning against social trading

Social trading platforms cannot do without criticism. For example, Börse Online wrote the following in a test of three social trading platforms that included “Follow my Trader”:

With these types of financial investments, without a professional asset manager, the financial supervisory authority generally advises BaFin to keep an eye on the potential risks. According to the authority’s findings, particularly volatile products are often traded in social trading, which quickly lead to high losses and, in the worst case, even result in obligations to make additional payments. The Bafin recommends that you select the trader you want to emulate with particular care, i.e. to find out about their qualifications and goals, instead of just looking at the performance of their portfolio.

The news about the three-party alliance is ultimately a positive signal for the crypto market. The cooperation shows that old banks are now also interested in giving their customers access to the comparatively young crypto market.

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