Our pricing model has two components - a monthly fee and a shared success fee.
What’s the monthly fee?
We charge a €3.90 monthly fee to cover all operational, holding and transaction expenses that occur in the process of investing your money into sustainable instruments. This means that you never have to incur any additional transaction costs.
To help you get started with sustainable investing on Grünfin, you don’t have to pay any fees until your portfolio reaches €1000.
Some investment products charge a percentage of your assets, meaning that the higher the value of your portfolio, the more you’ll pay every year. We charge a flat fee, which means that the higher the value of your portfolio, the less you pay on a relative basis.
How does the success fee work?
Most financial institutions and banks charge a percentage of your total assets as their fee regardless of how your portfolio is doing. We designed our pricing model to depend on the performance — so we’re always on your side.
When you create your personal portfolio, we set an indicative portfolio value target (see below). This becomes the threshold for our success fee, meaning that if we don’t exceed the target, we charge no fee on the actual gain. If your actual gain exceeds the target, our success fee will be 15% of the amount above your gain target.
You’ll see the personalised portfolio target when you create your portfolio. The targets will increase when you pay one-time payments or increase monthly payments. If you skip a payment or decide to pay less, the target will be adjusted accordingly.
How do we set the portfolio targets?
The indicative portfolio gain target is set based on your risk selection and time period. A longer investment period and higher risk tolerance indicate a higher growth target, which means a larger proportion of stocks in your portfolio.
We base our targets on the assumption that bonds grow at 2% and stocks grow at 8% per year on average.
If we consider the S&P500 as the benchmark for the stock market and individual portfolios, we can see that the average annual return since adopting 500 stocks into the index in 1957 through 2021 is roughly 8%.
As of February 2022, the 10-year US Treasury bond yield is 1.9% and the German Government bond is 0.2%.
An example of our success fee
Let’s assume you pay €200/month over 10 years (total payments of €24,000) with the indicative gain for your portfolio set at €12,000 (equal to a 50% gain over your total invested amount).
This means €36,000 (€24,000 + €12,000) is the portfolio target and the magic number against which the success fee will be measured.
If the value of your portfolio by the end of the holding period does not exceed €36,000, you will pay no success fee.
However, if the value of your portfolio exceeds €36,000 and ends at €40,000, for example, your gain above the target is €4,000. We would then apply our success fee as 15% of that €4,000 – that’s a fee of €600 at the end of the 10-year period.