Social trading provider ayondo is about to become the first company from the industry to have obtained a highly regarded BaFin license. The brokerage, which offers a copy-trading solution, is going to start operating via its BaFin-regulated subsidiary on the 1st of September.
As part of the changes around the licensing of the company, ayondo will also roll out a performance-based fee structure for top traders on the platform. One top of a fixed management fee, top traders will get additional remuneration based on the performance of their followers.
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The company is aiming to broaden the range of top traders that trade buy-and-hold strategies for followers.
BaFin License a Game-Changer for the German Market
The change is substantial especially for the lucrative German market, where investors are hungry for yield after years of ultra-low interest rates from the European Central Bank. With deposits at commercial banks yielding next to zero, the German public has been actively looking to divest its holdings.
Commenting on the news, the CEO of ayondo Group, Robert Lempka, 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 portfolio management license allows followers to follow the trades of one of the ‘Top Traders’ on ayondo. The client can adjust the risk parameters to suit his own risk profile. Once a choice is made about the risk-tolerance profile, the client is then notified if one of the chosen traders deviates from it.