The world keeps evolving day in and day out so does our way of life. Over the years, the services of human advisors have been utilized more by investors. However, in recent times the introduction of Robo advisors, which has become more popular, has done more good to it users by offering a simple and cost-effective way of investing to individuals than having to deal with or encounter human professionals. Robo Advisors have an aim of drawing more youth to engage in it services, investing their hard-earned monies for returns. Singapore is not an exception when it comes to countries that have accepted and resorted to Robo Advisors.
What is a Robo Advisor?
A Robo Advisor is an online investment management platform that offers financial assistance and services using computer algorithms or mathematical rules with little or no human involvement and interaction.
With Robo Advisor being very popular, it uses it platform to educate clients on the need to be risk-takers before taking a step to invest. They also offer customer care service to their clients, aiding them with their issues on investment. Robo Advisors also aids investors in opening accounts.
Each robo advisor platform has it unique service it offers to customers. Whilst some platforms offer cash management accounts in order for the investor to gain high returns, other platforms also offer solutions pertaining to personal investment to their client’s high net worth. Other platforms help their clients with remedy on will writing problems.
How to choose Robo Advisor?
All Robo Advisors have the unique roles they offer to clients. An individual who wants to invest must know the portfolio which will best suit him before taking a step to invest. To be able to choose well and right it is important to note the following:
a. The fee of the Robo Advisor platform one chooses to invest in doesn’t exceed the returns one will get in a year’s time. One has to understand the terms and conditions for the payment of fees annually in order not to end up with losses.
b. The Robo Advisor one selects suits one’s investment. Individuals must choose a platform or account that is genuine and matches with their preference. That is whether it’s an individual account or CPF, SRS and others.
c. The customer care service provided by Robo Advisor is good. The questions an investor must ask himself or herself are as follows;
i. Is the supposed Robo Advisor reliable?
ii. Will the Robo Advisor be available and ready to answer a certain question and help in finding solutions to one’s problem with investment if the need be?
iii. Will their response be on time?
What are the available Robo Advisors in Singapore?
The number of existing Robo Advisors in Singapore has increased, causing the platforms to be more than 10 (ten). Some of the existing ones in Singapore are; Stash Away, Endowus, Syfe, Kristal. Al, UOB U Trade, Money Owl, Auto Wealth, Squirrel Save, OCBC RoboInvest, UOBAM Invest and others.
How do Robo Advisors work?
Each of these Robo Advisor platforms has a unique role they play in investments made by their clients.
Stash Away is recognized as the most-known Robo Advisor platform in Singapore established in 2016. It is used mostly by clients with large investments. Clients pay a fee of 0.2%- 0.8% as a charge annually. This fee is used as a portfolio that one can invest in. These portfolios are; General investing, thematic, Goal-based investing, Income portfolio and SRS fund portfolio. A minimum investment of S$10,000 is made for an initial income portfolio only whilst there’s no minimum investment in a Goal-based portfolio, thematic portfolio and Stash Away simple. When the thematic portfolio is used, one is at a free will to invest in the field one wants. One can invest in ETFs from iShares, VanEck, ARK invest and many others. No amount is charged for Stash Away simple. However, being a cash management platform, a return rate of 1.2% p.a is made when used. Stash Away as a Robo Advisor platform is quite expensive, even though the bigger the investment, the lower the fee charged. It is well-known and used more because it can as well be found in other countries like Malaysia, UAE and Hong Kong thereby convincing more investors to rely on it.
Endowus, established in 2017, is best known and popularly used for CPF and SRS funds. An annual fee of 0.40% is paid by investors when making an investment in CPF and SRS funds. A fee of 0.25%-0.6% is charged annually when a client is investing with cash and 0.05% is paid for cash management. A minimum investment of $1000 is made on an investor’s initial investment. This amount was previously as high as $10,000. The amount one has to invest subsequently should be at least S$100.
The cash management portfolio of Endowus is such that investors can increase their returns on savings using Endowus Cash Smart.
Investors can get their own personal portfolios with Endowus fund smart, and will be able to select several funds that are highly recognized.
The general investing portfolio is such that CPF and SRS investment is best done with Endowus because of it affordability, charging as low as a 0.40% fee annually.
Syfe is considered the best and the platform with the highest number of portfolios amongst all the other Robo advisor platforms. Being established in 2019, it charges an annual fee varying from 0.4 to 0.65% depending on the amount invested.
There is no minimum investment amount an investor has to pay in the initial stage. Adapting to the Automated Risk-management Investment (ARI) which helps investors to choose the right portfolio for investment, has made Syfe the best. Syfe also has numerous portfolios. The Core portfolio for instance is made up of the core growth, core balanced, core defensive and core equity 100. Syfe again has the REIT portfolio thus the REIT+. With this portfolio, investors can choose the type of investments they want to do and can venture into Singaporean real estate. It has a cash management account with the name Syfe Cash+. There is the Syfe select portfolio and Syfe trade. With the Syfe select portfolio, one can invest in themes and custom. One can as well get their own personal portfolios.
Kristal. Al is known to be the most inexpensive amongst the other Robo advisors. Investors with less than$10,000 are not charged any fee. Those with 10,000 and more are charged as little as 0.3%.
There are two types of investments under Kristal. Al, the Kristal freedom and Kristal Private Wealth. Kristal freedom is open to all who want to invest. However, the Kristal Private Wealth is limited to investors who have accreditation. Investors of Kristal Private Wealth can choose portfolios that help them to invest into venture capital, private equity, stocks, cryptocurrency and even real estate.
Investors can choose their personal portfolios. However, Robo advisor’s algorithms controls whatever happens in the portfolio.
Kristal. Although transparent, it is not sometimes favourable to it users. Investors pay extra charges when depositing or making withdrawals in USD, AUD and some other currencies.
UOB U Trade Robo is a Robo advisor that was established in 2019, and it’s best known for it Bank-Run. It is the most favorable Robo investor backed by well-known big banks in Singapore. A minimum investment of $5000 is made on every portfolio an investor chooses in the initial stage. A minimum amount of $500 is done in the subsequent investments. A fee varying from 0.5%p.a to 0.88%p.a is paid by investors annually. This makes it the Robo advisor with relatively the highest charging fee compared to other Robo advisors. However, it is still considered as the Robo advisor with the lowest charging fee compared to other Bank-Run Robo advisors.
UOB U Trade Robo is best suited for investors who don’t want to take risk with their funds. This particular type of Robo advisor has a low probability of going bankrupt or going down because it has over S$30,000 billion in funds. Investors can invest in stocks, bonds and multi assets with the portfolios they choose.
Auto Wealth offers moderate but fixed charges to investors. A minimum investment of $3000 is made in the initial stage. A fee of $18 is paid by investors annually. Apart from this fee, they also pay 0.50% as flat annual management fee. Auto Wealth charges investors fixed prices whether the investment made is big or small. The fee may be expensive for investors with few portfolios; however, their returns will
be high. Auto Wealth platform charges low fee when compared to other Robo advisor platforms. Auto Wealth invests in Exchange-Traded Fund (ETFs) using Globally diversified stocks and government stocks.
Auto Wealth is a transparent platform that informs their clients on the improvement they’ve made in their investment making investors have control over their portfolios. Investors of Auto Wealth are assigned wealth managers who assist them on matters of investment. Since their fees charged are fixed, they avoid additional charges that may negatively affect their clients’ investment returns.
Auto Wealth gifts their new clients an amount S$20 when they use a referrer to sign up the platform.
Pros and cons of Robo Advisors
Even though all the robo advisors in Singapore have their investment services what makes them special and beneficial to their clients in their own way, all investors also have the robo advisor platform which best suits them and may get them the higher return they want. These Robo advisors however, have their ill sides or demerits as well.
The following below are the benefits and demerits of the various robo advisors.
Stash Away doesn’t charge investors any minimum investment fee. However, the annual fee charged for a beginner is high, making the platform best suitable and favourable for investors with larger investments.
Endowus gives investors the free will to have and select the portfolio of their preference. Also, it is best suitable for investors of CPF and SRS investments who need a simple way to invest with little or no effort. Endowus charges its investors $1000 as a minimum investment fee in the initial stage, which is expensive.
Syfe doesn’t charge investors any minimum investment fee, making the platform quite cheap and best, especially for first-time investors with little funds. Also, since it is the platform best known to have the highest number of portfolios, it helps investors to select the portfolios of their preference. Again, Syfe provides good customer care service to clients through their wealth managers, who freely assist investors with their preferences with portfolios.
Syfe, with it’s numerous portfolios are not all reliable. Global ARI is no longer in existence.
Kristal. Al platform offers investors the free will to choose their personal portfolios. However, the platform charges additional fees when an investor uses USD, EUR, AUD and GBP. This may affect investors with little investments.
UOB U Trade Robo is credibly reputable. This makes it one of the most reliable platforms in Singapore. Also, UOB U Trade Robo is managed by a highly recognised Bank, thereby the low probability of it going bankrupt. Again, it is the cheapest Bank-Run Robo advisor platform compared to other Bank-Run Robo Advisor platforms.
Unfortunately, UOB U Trade Robo is very expensive when it’s compared to other Robo advisor platforms, which are not bank-run.
Auto Wealth platform gives investors some sweet offers. An investor is assigned a wealth manager to assist him or her on issues of his funds and investment. The demerit of using Auto Wealth is that an investor has a limited risk profile to select from.
Who should use a Robo Advisor?
An investor has a major aim of boosting his returns. A Robo Advisor is best suitable for particular individuals with specific kinds of needs, especially the youth who, instead of saving or investing their funds to human advisors, can invest it in Robo Advisors to amass wealth in the future. A Robo Advisor platform is easy
and fast to sign up with low-cost charges, therefore best for investors who are beginners.