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(Updated on 21 March 2019 for clarity on the fees charged by each robo-advisor platform.)
Robo-advisors are some of the most widely discussed investment options in recent times. Besides early entrants such as AutoWealth and StashAway, banks such as OCBC, UOB, and CIMB have also started offering their own robo-advisor service.
One of the selling points of robo-advisors is their low fees, relative to traditional funds that charge higher management fees.
Most robo-advisors charge an annual management fee as a percentage of the total assets under management (AUM). Some robo-advisors also charge a platform fee. Other fees that could be incurred include the expense ratio and currency conversion fee.
What Are The Fees Charged By Singapore Robo-Advisors?
Here’s a look at the management fees charged by each of the robo-advisors, as well as how much investors would be paying in a given year depending on various investment amounts.
*Only AutoWealth charges a platform fee. This platform fee covers all custody fees & transaction fees.
**StashAway states upfront the conversion fee for non-USD deposits. Other platforms may or may not charge such a fee, as it is not stated on the website of other platforms.
***Smartly states their expense ratio upfront. This may already incorporate other fees charged separately by other robo-advisors.
****Transaction fees for portfolio rebalancing are common. Some robo-advisors pass this fee on to customers while others opt to absorb this fee within other fee structures.
*****CGS-CIMB states that exchange charges and fees as well as the withdrawal of securities will be charged and passed to customers. Other Robo-advisors incur these fees as well, but whether it is passed on to customers depends on the robo-advisor itself.
The fees and charges stated in the table above reflect what can be found on the websites of these individual robo-advisors.
Besides the annual management fee, other potential fees include the expense ratio (for ETFs), exchange charges, portfolio rebalancing and withdrawal of securities. Different robo-advisors have different ways of charging these fees, for example, some robo-advisors absorb the fees incurred for portfolio rebalancing. These additional fees could add up significantly if you frequently have to rebalance your portfolio or withdraw your securities.
Fees should certainly be one of the considerations when choosing a robo-advisor, simply because high fees eat into your overall investment returns. With lower fees incurred every year, that leaves you more investment returns that will be able to reap the benefits of compounding over the years.
However, fees should never be the only consideration. While the table above shows the fees incurred when you invest with these robo-advisors, the cheapest might not necessarily be the best. Each of these robo-advisors have their own investment methodology and the assets they invest in vary as well.
Get Started With Investing With Robo-Advisors
For those looking to invest with robo-advisors, here are some promotions and promo codes DollarsAndSense has available for AutoWealth and StashAway:
AutoWealth: Use the promo code ‘DollarsAndSense‘ to receive a $20 top-up into your account once you fund it with the $3,000 minimum. Registration with AutoWealth is free.
StashAway: StashAway is giving 50% off in management fees for 6 months, for up to $50,000 in portfolio value. That makes it perfect for taking StashAway on a test drive and see if it is the robo-advisor for you. You can also start investing your SRS funds with StashAway to start growing your retirement nest egg today. Sign-up for free today here.