As technology improves and advances, the wealth management industry has to keep up as well. A relatively new development in wealth management and investing is the idea of “Robo Advisors”.
Robo Advisors have experienced an exponential increase in popularity within the investment industry. That is why it is not a surprise that one of the major financial centres in the world is joining in on this: Singapore.
If you have no idea what this is about, this article will give you an overview of what Robo Advisors are, how you can use it to make your money work harder for you, and 8 Robo Advisors in Singapore that you should consider.
What is a Robo Advisor?
Before we jump right in, let us first define what a robo advisor is.
Robo Advisors are digital platforms that provide automated and algorithm-driven financial planning services like investing. This service requires little to no human supervision.
A Robo Advisor collects information from clients about their financial situation as well as their future goals. To do this, you are usually required to answer a survey or a couple of online questions. Using data about your investing preferences, the robo advisor would advise or invest accordingly.
When robo advisory first started out, the offerings were simple and rather limited – you can choose to invest a lump sum or top-up on a regular basis. The robo advisor would invest it for you based on their algorithm.
Today, robo advisories have several algorithm driven portfolios to cater for investors with different goals and risk appetite.
Advantages of Robo Advisors
- Low Cost
Most robo advisors in Singapore charge an annual fee of 0.5% to 1%.
- Low Barrier of Entry with no minimum balance requirements
A robo advisor is like a low cost fund manager. To join funds managed by famous managers such as Ray Dalio, investors often have to cough out huge sums of at least $500,000. This makes them inaccessible to most investors.
Many robo advisor do not have any minimum investment amount requirements. Those that do generally only require a small sum of money to start your portfolio (eg from $50 to $1000).
- No lock-ins
Many robo advisors do not have a lock in period. This means the money you’ve invested has high liquidity and you can withdraw them anytime, should you need to.
- Gives investors access to Proven Investment Models
The algorithms on which robo advisors run on are usually backed by data. Some robo advisors would even keep their algorithms up to date, depending on market changes. This can give investors confidence while helping them save time and effort required to make the investments on their own.
Disadvantages of Robo Advisors
Nothing is perfect in this world. Here’re some disadvantages of robo advisors that you should know, before you put your money in.
- Not personalised
Everyone invests for specific goals, however robo advisors may not be able to provide suitable portfolios that could match up to your goals.
This issue should improve over time as the robo advisory space matures.
- Hands off
You do not have direct control over what is being invested. You only put your money in and trust that the robo advisor’s algorithm works.
This is disadvantageous for investors who prefer to customise their investments. In this case, robo advisors may not be the investing vehicle for you.
- Returns are not guaranteed.
Although the marketing materials tend to feature a potential return, do keep in mind that returns are subject to market conditions!
Robo Advisors in Singapore
Robo advisors used to be a niche service offered by a few fund managers. As the service gained popularity, we are seeing an increase in the number of robo advisors in Singapore. Even the major banks are jumping into the game!
Here’re the top robo advisors in Singapore, we aim to keep this list updated, leave a comment if we missed something out.
1. AutoWealth
AutoWealth is one of the first robo advisors in Singapore, although they don’t seem to be promoting as heavily in Singapore these days. It was started in 2015 by ex Investment Banker at Government Firm and ex Management Consultant, Ow Tai Zhi and Noel Lee respectively. AutoWealth is licensed under the MAS Financial Advisor License (FA100064-1).
They use a proprietary algorithm to provide financial advice and investment management only. And provide customers with precise investment recommendations minus the processing time and middleman profits. These recommendations include:
- The ideal composition of their investment assets
- The initial sum to invest
- The periodic investment installments
How much do you need to get started?
To invest with AutoWealth, you need a minimum of S$3,000. Fees include a flat 0.5% of total invested + USD18 platform fee per year.
2. StashAway
Another early entrant in Singapore’s robo advisory space is StashAway. It was established in 2016 by ex ZALORA Group CEO, Michele Ferrario and ex Normura MD, Freddy Lim. StashAway was granted a Capital Market Services License in May 2017.
Before you begin investing, you’ll need to complete their online questionnaire to help them understand your investing goals by providing your:
- Salary
- Monthly Savings Capacity
- Risk Preferences
- Time Horizon
How much do you need to get started?
There is no minimum investment amount to start with Stashaway. Management fees ranges between 0.2% to 0.8%, depending on your total investment amount. You can withdraw your money any time. You have the option to invest via cash or your SRS funds.
StashAway also provides a cash management portfolio that lets you grow your money at a projected rate of 1.2% p.a. This Income Portfolio has a $10,000 minimum requirement.
We had interviewed StashAway’s CEO to understand about their services previously:
3. Syfe
Syfe is another popular Robo Advisor in Singapore. It was founded in 2017 by Dhruv Arora (previously from Swiss Investment bank, UBS).
Syfe is regulated by the Monetary Authority of Singapore (MAS) and is licensed under the Capital Markets Services License.
How much do you need to get started?
There is no minimum investment amount required to start investing with Syfe, if you are transferring funds in SGD. Fees ranges between 0.4% to 0.65%, depending on the total sum of your investment.
There is no minimum hold or lock-in periods nor withdrawal fees which means you can withdraw your money any time.
At the point of writing, they have a suite of 7 portfolios designed for investors with different goals, we shared about their Equity100 portfolio here.
They are backed by Valar, a New York based venture firm and Unbound, a VC based in London. We had interviewed Syfe’s CEO to understand about their services previously:
4. Endowus
Endowus is an award winning robo advisor in Singapore, led by Samuel Rhee, ex CEO and CIO of Morgan Stanley Investment Management in Asia. They are a Capital Markets Service Licence holder and are regulated by MAS under the Securities and Futures Act of Singapore.
They are the “first and only digital advisor for CPF, SRS and cash savings.” and aims to help you invest “holistically, conveniently and with expert advice at the lowest cost possible”.
It is easy to get started. All you need to do is to create an account (you can do so with SingPass), answer their questionaire to generate a personalised plan.
How much do you need to get started?
There is an initial minimum investment amount of $1,000 which you can fulfil using different funding across Cash, CPF and SRS.
Access fees on cash accounts ranges between 0.25% to 0.60%, depending on the total sum of your investment. Fees on CPF and SRS investments are charged a flat 0.40% fee. There is no lock-in period nor withdrawal fees which means you can withdraw your money any time.
With Endowus, you can investing using your cash, CPF or SRS monies.
I was invited for a discussion on Factor Based Investing with Endowus previously:
5. MoneyOwl
MoneyOwl is a financial and fund management company licensed by the MAS that claims to be “Singapore’s 1st Bionic Financial Adviser”. MoneyOwl is a social enterprise and a joint venture between NTUC Enterprise Co-operative Limited and Providend Holding Private Limited.
Their main service is a one-stop platform to help Singaporeans develop a fit-for-purpose financial plan.
How much do you need to get started with MoneyOwl’s Dimensional?
You can start with as little as $50 per month or $100 (one off) for access to evidence based portfolios that invest in high quality investments. There are five portfolios you can choose from, depending on your investment goals and risk appetite. You have the option to invest via cash or your SRS funds.
Fees off your first $10,000 are waived, subsequently advisory fees start from 0.5% p.a.
We interviewed MoneyOwl’s CEO/CIO and Executive Director to understand how they empower individuals as a social enterprise:
With the robo advisor scene heating up, the banks and stock brokers are starting to get into the picture. I’ve included their robo investing services here as well.
6. DBS digiPortfolio
almost a robo advisor, but not…
DBS’ digiPortfolio is a service that compete against robo advisors. It allows you to invest into two ready made ETF portfolios (see image above), without having to worry about what to invest in. I shared why I recommended it to my wife here.
Unlike regular robo advisors, you do not need to partake in a questionaire nor have a wide range of portfolios to choose from. Instead, you only need to choose between a Singapore or a Global portfolio.
How much do you need to get started?
There is an initial minimum investment amount of $1,000. There will only be a single flat 0.75% management fee per annum. There are no account opening or closing fees, transactions fee nor withdrawal fees.
There is no lock-in period nor withdrawal fees which means you can withdraw your money any time.
7. OCBC RoboInvest
OCBC RoboInvest lets you choose from 36 portfolios with different investment themes, across 6 markets. It is a collaboration between OCBC and a Fintech firm Planar Investments Pte Ltd (WeInvest).
Again, unlike regular robo advisors, you do not need to partake in a questionaire. Instead, you get to choose from a wide range of portfolios with different investment themes. At the point of writing, the top performing portfolios include “Gen Z Winners” (102.62% annual return), “US Cloud Computing” (93.15% annual return) and “Asia Tech”(92.65% annual return).
How much do you need to get started?
You can start with just US$100. A service fee of 0.88% p.a. will be charged based on the total value of your investment held in OCBC RoboInvest. There may be additional exchange rate fees or charges.
There is no lock-in period nor withdrawal fees which means you can withdraw your money any time.
8. UOB
UTrade Robo is a robo advisory service by UOBKayHian, a stock brokerage backed by the UOB Group.
As summarised in the image above, you’ll get a customised portfolio recommendation after you complete their online questionaire. Once you are invested, you can go hands free and let the UTrade Robo handle the monitoring and rebalancing of the portfolio.
How much do you need to get started?
You’ll need a minimum of $5,000 to start with UTRADE Robo. There is also a $500 minimum amount for subsequent investments, which means you need to top up at least $500 each time. Fees range between 0.5% to 0.88% p.a., depending on the total value of your investment.
There is no lock-in period nor withdrawal fees which means you can withdraw your money any time.
Comparison
Here’s a quick comparison of the 8 Robos we’ve featured:
| Robo Advisor | Min Investement Amount | Fees | Portfolio |
|---|---|---|---|
| AutoWealth | S$3000 | 0.5% p.a. of total invested + USD18 platform fee per year | A portfolio mix of Equity (Stocks) and Fixed Income (Govt Bonds), diversified across major geographical regions in the world including U.S., Europe and Asia Pacific and diversified across major industries including oil & gas, materials, industrials, consumer goods, health care, consumer services, telecommunications, utilities, financials & technology. |
| StashAway | Nil | 0.2% (more than S$1mil) to 0.8% (less than S$25k),
depending on total investment amount | General Investing Core Portfolios – StashAway Risk Index 6.5%, 8%, 10%, 12%, 14%, 16%, 18%, 20%, 22%, General Investing Higher Risk Portfolios – StashAway Risk Index 26%, 30%, 36%3 Thematic Portfolios – Technology Enablers, The Future of Consumer Tech, Healthcare Innovation |
| SYFE | Nil | 0.4% (more than S$100k) to 0.65% (less than S$20k),
depending on total investment amount | SYFE Core Equity100, SYFE Core Growth, SYFE Core Balanced, SYFE Core Defensive – The Core portfolios comprises stock, bond, and gold ETFs that aim to provide global diversification and better risk-adjusted returns.
SYFE REIT+ – Singapore REIT portfolio that tracks the SGX’s iEdge S-REIT Leaders Index Syfe Select Themes – 5 Thematic Portfolios: ESG & Clean Energy, Disruptive Technology, Healthcare Innovation, China Growth, Global Income SYFE Select Custom – Build your own personalised portflios from a curated list of over 100 best-in-class ETFs |
| Endowus | S$1000 | Cash Accounts – 0.25% (more than S$5 mil) to 0.60% (up to S$200k), depending on total investement amountCPF/SRS – 0.4% | Core Portfolio – Low cost, globally diversified portfolioESG Portfolio – Low cost, globally diversified sustainable ESG portfolio built with industry leading multi-manager ESG funds |
| MoneyOwl | S$50 (per month) or S$100 (one off) | Fees for first $10,000 are waived, subsequently at 0.5% | 5 portfollios of varying risk/return levels –
Equity, Growth, Balanced, Moderate, Conservative |
| DBS digiPortfolio | S$1000 or US$1000 | 0.75% | Two ready made ETF portfolioAsia Portfolio – Asia with Singapore Focus via Singapore Listed ETFs
Global Portfolio – via UK listed ETFs with global exposure |
| OCBC RoboInvest | US$100 | 0.88% | 36 portfolios with different investment themes, across 6 markets. Examples: Electric Vehicle, Cyber Security, Singapore Cash Is King, Dogs of the Dow, Gen-Z Winners and many more |
| UOB UTrade Robo | S$5000 for initial investment, subsequent S$500 for each top up | 0.5% (more than S$100k) to 0.88% (less than S$50k), depending on total investement amount | UTrade Robo portfolios are globally diversified, multi-asset portfolios, built using low cost ETFs.Conservative, Moderate, Aggressive |
Conclusion
There is no easier time to start making your money work harder for you.
Previously, investors had to grapple with learning to invest, understanding how businesses function, know how macro economics work and so much more in order to invest successfully.
Today, aspiring investors can easily start with small sums of money and let the experts behind the robo advisors do the work for them!