MoneyOwl – humanising roboadvisors to better serve consumers

Alvin Chow
Alvin Chow

There are a handful roboadvisors nowadays and it is often difficult to tell the differences among them.

Although MoneyOwl is often categorised as a ‘roboadvisors’, I have learnt that they are a very different setup altogether.

I spoke with Chuin Ting (CEO/CIO of MoneyOwl) and Christopher Tan (Executive Director of MoneyOwl). They distinguish themselves using the 3 Cs.

You can watch the interview or proceed to read my summary below.

The first C = Comprehensive

Most roboadvisors are primarily focused on investing.

This is where MoneyOwl stands out – they go beyond investing to include budgeting, protection and even life goals.

According to Chris, every decision we make has an impact to the other areas of our lives and hence financial planning has to be holistic. In fact, it is often a balance among 3 areas – life goals, investment goals and financial planning.

That said, MoneyOwl continues to serve people who are looking for ‘ala-carte’ financial planning services. For example, you can choose to draw up a will for free (usually cost at least S$100) or buy insurance and investment products directly.

Of course, this isn’t advisable if you do not have a clear idea of your overall financial plan.

The second C = Competence

MoneyOwl isn’t technically a roboadvisor because they place an emphasis on the need for human advisors to produce a comprehensive financial plan.

It is currently still not possible to rely on algorithms or machines to understand the financial needs or life goals of a unique individual. Human beings are too complex. Sometimes, they may not want the highest investment returns but are instead looking to achieve other specific life goals. Such nuances can only be picked up by humans.

Also, financial planning is not just about implementing concepts. Human advisors also help to educate, change perspectives and soothe anxiety of their clients. Technology is there to assist the advisors to better carry out their duties rather than to replace them.

Chris believes that financial planning should be recognised as a respectable profession just like doctors and lawyers. Planners should conduct themselves as experts with high standards of competency, doing their best for their clients. In this age of tech and digitization, Chris believes that human advisors can prevail if they do their job well.

To achieve this goal, MoneyOwl expects all their advisors to attain the CFP certification and there are internal trainings to further their competency.

I asked what if these advisors leave after receiving their training and was impressed by Chuin Ting’s answer – she believes that it would be a good testament that they have done a good job training their advisors up. Even if they leave for other companies, the entire financial planning industry would eventually become a better place, with a higher standard.

Her answer reminded me of this:

The third C = Conflict-free

The advisors hired by MoneyOwl are paid a salary. This is unlike most of the financial advisors who are paid through sales commissions.

Incentives drive behaviour – some advisors may push more products in order to receive more commissions. Although not every commission-based advisors may behave this way, the system is structured to encourage such behaviour.

Hence, being paid a salary and not receiving any commissions would minimise the conflict between the advisor and the client.

Chris said that a client may not buy anything after a comprehensive financial planning is done.

MoneyOwl’s structure assures that no advisor will be pushing for any sales.

A social enterprise

MoneyOwl is co-owned by NTUC Enterprise and Providend.

Chuin Ting recounted a short history of MoneyOwl – she was tasked to look into financial advisory for the masses as part of the NTUC Social Enterprise project. She found a subject matter expert in Providend and they partnered to form MoneyOwl.

The advantage of being a social enterprise is that it would be able to offer its services at more affordable prices because they are not as focused on maximising profits. Their main focus is to best serve the public.

That said, a social enterprise is not a charity and it has to generate its own revenue to sustain its cost of operations. MoneyOwl does not receive any donations. Hence, it has to be a viable business model to stand on its own feet.

How to get more people to care about money

A topic that interests me and my guests was how to get more people to care about money.

Even though we know financial planning is important and that money touches many aspects of our lives, most people tend to procrastinate it.

It usually takes certain triggers (someone close contracted a disease or passing away) for one to see the urgency to do something about their finances. And in some cases, it may be too late.

I put the question to my guests. They gave candid answers, admitting that there isn’t a good solution.

I suggested financial literacy but Chris quoted a study by UCLA’s Professor of Behavioral Decision Making, Shlomo Benartzi, that financial education was ineffective in changing behaviour.

He went on to mention that regulations, though unpopular, would be the most effective to shape the behaviour of the masses. Other than that, there aren’t good solutions at the moment.

Please comment below if you have good ideas.

Experience a financial planning process without hard selling

I hope it gives you a good picture of what MoneyOwl stands for – I believe it would resonate with some of you.

If you have been procrastinating your financial plans because you are afraid of hard selling, you may want to consider setting up an appointment with MoneyOwl.

You can get a comprehensive financial plan for just S$99.

It is a mass market price and a typical fee-based advisor will cost several times of that. Nobody is trying to fleece you. Head over to MoneyOwl now.

Alvin Chow
Alvin Chow
CEO of Dr Wealth. Built a business to empower DIY investors to make better investments. A believer of the Factor-based Investing approach and runs a Multi-Factor Portfolio that taps on the Value, Size, and Profitability Factors. Conducts the flagship Intelligent Investor Immersive program under Dr Wealth. An author of Secrets of Singapore Trading Gurus and Singapore Permanent Portfolio. Featured on various media such as MoneyFM 89.3, Kiss92, Straits Times and Lianhe Zaobao. Given talks at events organised by SGX, DBS, CPF and many others.
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