This article was updated on 22 August 2019 to include new robo advisors.
Everywhere we look, algorithms have already made a big impact on the way we live. It comes as no surprise that we would also increasingly rely on algorithms to solve our investing needs. This is where robo-advisor platforms in Singapore offer us a solution to invest like a professional without actually requiring us to have any financial or investment knowledge.
Before we go into the individual platforms, we should understand some basics about robo-advisor platforms.
What Is A Robo Advisor?
Robo advisor platforms share many similarities with traditional fund management. They pool together the monies of many smaller investors to make large and diverse investments. This helps smaller investors lower sales charges and achieve diversification even if they only invest a small sum of money. In addition, they also get to enjoy taking a passive approach to managing their investments.
The term “robo advisors” is commonly used to describe digital platforms that utilise automated solutions and algorithms to help us invest and manage our money. By doing this, robo-advisors are able to reduce the number of human advisors they employ, offer more consistent advice, and scale up operations very efficiently.
These platforms are able to do this by collecting our data, such as our unique financial situation, risk tolerance and future goals, and offer us a recommended portfolio based on their investment methodology.
It is important to note that algorithms any robo-advisor platforms use are ultimately programmed by humans based on financial models and follow a set of rules and instructions. These set of rules and instructions can also be tweaked by them from time to time.
What Are The Robo Advisor Platforms Available To Singapore Investors?
In recent years, there have been a number of automated and algorithm based invest solutions offered to Singapore investors. This is unsurprising, following the increase in popularity of such investment solutions globally.
In Singapore, there are 9 main robo-advisory platforms that retail investors can choose to invest our money with:
|Launched||Minimum Investment||Yearly Advisor Fees|
|Investments In Funds|
|DBS digiPortfolio||2019||$1,000 to $10,000||0.75% to 0.85%|
|endowus||2018||$10,000||Access Fee: 0.25% to 0.6%|
|MoneyOwl||2019||$100||Advisory Fee: 0.65%
Custodian/Platform Fee: 0.18%
|Investments In ETFs|
|Autowealth||2015||$3,000||0.5% + USD$18 platform fee|
|Smartly||2015||None||0.5% to 1.0%|
|StashAway||2016||None||0.2% to 0.8%|
|Syfe||2019||None||0.4 to 0.65%|
|UTrade Robo (UOB Kay Hian)||2018||$5,000||0.5% to 0.88%|
|Investments In Individual Stocks And ETFs|
|CGS CIMB eWealth||2018||$2,800 (Goals Investing)
$3,500 (Thematic Investing)
|0.5% to 0.8%|
|FSM MAPS||2017||$1,000||0.35% to 0.5%|
As you can see, even between robo-advisor platforms, there are different investment methodologies. Below is more information on each of the robo-advisor platform.
Investments In Funds
Newly created in 2019, the DBS digiPortfolio is a robo-advisory platform that leverages on DBS’ existing business and proficiencies. It currently provides investors with two main portfolios – Global Portfolio and Global Portfolio Plus – consisting unit trusts.
DBS digiPortfolio leverages on its portfolio management team to construct portfolios comprising the best funds from DBS’ platform, while aligning its investment strategy with the Chief Investment Office and relying on its fund managers for in-depth research and assessment of investments.
DBS digiPortfolio is only available to DBS Treasures customers, which requires a minimum deposit/investment of $350,000. If we qualify, there is a minimum investment amount of between $1,000 and $10,000, and a fee of between 0.75% and 0.85%:
- Global Portfolio – $1,000 minimum investment; 0.75%
- Global Portfolio Plus – $10,000 minimum investment; 0.75% to 0.85%
(Updated on 24 April 2019: This article was updated to reflect that we need to be a DBS Treasures customer in order to be able to invest via DBS digiPortfolio.)
# 2 endowus
endowus is licensed under the Monetary Authority of Singapore (MAS), under the Financial Advisers Act (FA License No. 100066-1), to provide certain financial advisory services.
endowus is an independent fee-only financial advisor, providing high-quality financial advice and creating personalised asset allocation and portfolio for investors. endowus believes in a systematic and evidence-based investment approach, driving its motivation to select the best-in-class funds, while building a globally-diversified and low-cost portfolio for investors.
It offers retail investors access to institutional share classes, which were never previously within reach, on funds offered by world-renowned global investment management companies, Dimensional Fund Advisory and PIMCO.
endowus charges a transparent access fee of 0.25% to 0.60%, depending on the amount invested. It explicitly states that it only earns this fee from its client. On the other hand, it also makes clear that investors have to pay fund management fee of between 0.43% to 0.55%. Many times, investors are not aware of these charges as they are on a fund-level and typically not divulged by other platforms.
- Under $200,000 – 0.6%
- Above $200,000 to $1,000,000 – 0.5%
- Above $1,000,000 to $5,000,000 – 0.35%
- Above $5,000,000 – 0.25%
# 3 MoneyOwl
Launched in 2019, MoneyOwl is a joint venture between NTUC Enterprise and Providend. It offers bionic investment advice – which means it incorporates advice from both humans and robots to deliver low-cost investment solution to its clients.
Currently, MoneyOwl offers 5 investment profiles – Equity, Growth, Balanced, Moderate and Conversative – which are created through different combinations of 3 globally diversified Dimensional equity and bond funds, based on their ability, willingness and need to take risks.
MoneyOwl charges an advisory fee of 0.65% (from now till 31 Dec 2019, there is promotional advisory fee of 0.50%), as well as levy a custodian/platform fee of 0.18%. This brings its total fees to 0.83%. The minimum investment amount is either $100 for one-off investments and $50 a month for regular savings plans.
Investments In ETFs
# 4 AutoWealth
Started in 2015, AutoWealth has a MAS Financial Advisor Licence (FA100064-1).
AutoWealth’s fees are at a flat 0.5% per year, regardless of total amount invested, plus an annual platform fee of USD$18. It requires a minimum of S$3,000 to start investing. AutoWealth has no lock-in period for investments and clients are free to withdraw their investment capital or close the investment account anytime.
If you’re interested to give AutoWealth a try, be sure to use the promo code DollarsAndSense to receive a $20 top-up into your account once you fund it with the $3,000 minimum.
# 5 Smartly
Started in 2015, Smartly works with VCG Partners Pte. Ltd., which is a MAS-licensed fund manager. Smartly is a technology provider and does not invest your money directly. Rather, you are technically investing through the licensed fund manager, VCG Partners Pte. Ltd.
There is no minimum needed to start investing and no minimum commitment period. Fees for using Smartly are between 1% to 0.5% per year:
- Under $10,000 – 1.0%
- Above $10,000 – 0.7%
- Above $100,000 – 0.5%
In July 2019, Smartly’s business operations was acquired by Vietnam-based investment company VinaCapital.
# 6 StashAway
Stashaway was started in 2016 and operates under the MAS’ Capital Market Services Licence (CMS100604-1).
They employ a proprietary investment strategy they call Economic Regime-based Asset Allocation (ERAA), which is based on the theory of economic cycles. Through monitoring changing economic indicators, they rebalance the asset allocation mix of customers’ portfolios accordingly. It offers 31 risk profiles based on 19 ETFs investments spanning diverse sectors and geographies.
StashAway’s fees range between 0.2% to 0.8% per year, depending on amount invested:
- First $25,000 – 0.8%
- Above $25,000 to $50,000 – 0.7%
- Above $50,000 to $100,000 – 0.6%
- Above $100,000 to $250,000 – 0.5%
- Above $250,000 to $500,000 – 0.4%
- Above $500,000 to $1,000,000 – 0.3%
- Above $1,000,000 – 0.2%
Since December 2018, you can also invest your Supplementary Retirement Scheme (SRS) funds via StashAway.
For those who are interested to try the StashAway platform for yourself, 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 sign-up for free today to enjoy this exclusive promotion.
# 7 Syfe
Syfe is a digital wealth manager that launched in Singapore in July 2019 after raising $5.2 million in seed funding and receiving the capital markets services (CMS) license from the MAS. Syfe uses Automated Risk-managed Investments (ARI) strategy, their proprietary investment methodology, which automatically adjusts your portfolio to ensure enhanced risk-adjusted returns by managing your portfolio’s downside risk.
There is no minimum amount for investors to start investing with Syfe. Syfe charges 0.65% per year on your invested amount. This 0.65% all-inclusive fee gives you unlimited, free withdrawals and unlimited rebalancing.
If you’re interested to give Syfe a try, there is a special offer for DollarsAndSense readers to receive bonuses added to their Syfe account:
$10 bonus for funding your Syfe account (any amount)
$50 bonus for investing more than $10,000 with Syfe
$100 bonus for investing more than $20,000 with Syfe
This bonus will be credited within 7 days after receiving your funds and invested together with your portfolio.To enjoy this promotion, you will need to maintain the portfolio with Syfe for at least 3 months. You can read more details on the promotion here.
# 8 UTrade Robo (UOB Kay Hian)
UOB Kay Hian’s UTrade Robo is another recent entry to robo-investing market. UTrade Robo identifies asset classes comprising multi-assets, including stocks, bonds and commodities, as well as globally diversified portfolios.
It has a minimum investment amount of $5,000 and charges a fee of between 0.5% and 0.88%:
- Under $50,000 – 0.88%
- Above $50,000 – 0.68%
- Above $100,000 – 0.5%
Investments In Individual Stocks And ETFs
# 9 CGS CIMB eWealth
eWealth, CGS CIMB’s robo advisory platform, was launched in August 2018. It recommends a customised portfolio to suit individual investors’ needs. It offers Thematic Investing with individual stocks within a region or sector as well as Goal Investing via ETFs in stocks, bonds or fixed income and commodities, taking clients’ risk tolerance into consideration.
It requires a minimum investment sum of $2,800 (Goals Investing) and $3,500 (Thematic Investing) and subsequent minimum investment sum of $500. It charges a management fee between 0.5% and 0.8%:
- Under $25,000 – 0.8%
- Above $25,000 to $50,000 – 0.7%
- Above $50,000 to $100,000 – 0.6%
- Above $100,000 – 0.5%
# 10 FSM MAPS
Launched in 2017, FSM MAPS doesn’t completely leave the analysis and investment decisions to a predetermined algorithm. Rather, its portfolio managers and research analysts study the markets and products available in the market to gain the exposure they desire.
A management fee of 0.5% per year or below (depending on portfolio) is levied on investments. Investors have to fork out a transactional charge of 0.04% as well as the relevant SGX Clearing and Trading fees, including GST for ETF transactions. Investors have to start with a minimum of $500 for its Regular Savings Plan and $1,000 for a lump sum investment.
# 11 OCBC RoboInvest
OCBC RoboInvest was launched in August 2018, making it the first bank in Singapore to offer a robo advisory solution. It offers a diverse selection of 28 thematic portfolios across five risk tolerance levels for its investors.
Uniquely, it is the only platform offering the ability to get invested into individual stocks within the themes we select.
Annual fees of 0.88% apply, and other fees such as Exchange fees and charges may also apply. Customers are required to start with a minimum of $3,500.
How Robo Advisors In Singapore Work
Each platform has its own unique ways of offering a robo advisor financial service, but the broad overview is the same:
Step 1: Sign-up and answer a detailed questionnaire about your risk appetite and intended investment time horizon.
Step 2: Fund your account, either on a lump sum or monthly basis.
Step 3: Upon receiving your funds, your robo advisor will then purchase a mix of ETFs (and if applicable, other assets) that corresponds to what they consider “optimal” based on your profile and the current market conditions.
Step 4: The robo advisor will monitor the market and perform rebalancing when necessary to manage risk and maximise potential returns.
As far as we can tell, all of the robo advisors make the majority of their investments in US and global ETFs with exposure to a variety of asset classes including equities, bonds, gold and other commodities.
Comparison Based On The Amount Invested, And The Fees Charged
Some investors may make their decision on which robo advisor platform to use base on the amount they intend to invest. We don’t recommend that you only look at fees only, since the main decision criteria should be whether you agree with their investment methodology in the first place. As with all investments, do not invest in something you do not fully understand.
However, cost is nevertheless a factor we should not ignore. Here’s a rough guide to the cost that you can expect to incur using each of the platform.
|Annual Fees/ year||
|CGS CIMB eWealth||–||$88||$306||$1,250|
Based on USD/SGD exchange rate of 1.35
Do note that beyond the fees that you fork out, there are also other fees involved when investing. Do look out for the Total Expense Ratio of the funds or investments before putting your money into it.
Pros And Cons Of Investing With A Robo Advisor
Pro #1: You Don’t Need a Large Amount of Capital
When investing as an individual, there are minimum trade sizes and high transaction costs imposed on the account, and this makes investing as an individual cost-prohibitive. Robo advisors allows you to own fractional portions of ETFs, which is impossible to do on your own unless you have a large capital.
Pro #2: Diversification
Because of the scale that technology enables, robo advisors can offer detailed monitoring of market indicators and apply sophisticated investment strategies based on them, much like what mutual funds provide, but at lower cost.
Pro #3: Personalised Portfolio
Rather than needing to pick from a list of mutual funds that you think best fit your needs, robo advisors can give you a portfolio mix that is more finely tuned to your needs (as the robo advisor deems to be appropriate), though not completely personalised on an individual level.
Pro #4: Passive Approach
The idea with robo advisors is that you do not need to rebalance your portfolio as market conditions change. Rebalancing is done by robo advisors for you, automatically.
Pro #5: “Low Fees”
Robo advisors generally charge lower annual management fees than professionally managed funds do. We all know that fees have a compounding effect that eats into our returns, especially over the long term. The higher the fees, the less returns we enjoy for the same amount invested and asset performance.
This point about “low fees” does come with a caveat. While robo advisor fees are admittedly lower than what mutual funds charge, it is still an additional cost that you are incurring, as opposed to buying the ETFs yourself and managing your own portfolio. So you need to decide if the value robo advisors provide is worth the fees you pay, over the long-term.
Con #1: Letting Emotions Get In The Way
Even though you automating the investment process, your emotions can still sway your decisions. This means panic selling during a downturn or making the decision to sell after an upswing in the markets.
Con #2: Forgetting Your Long-Term Investment Needs
Because you automated your investments, you may think it is well taken care of. However, you may forget to increase your investment size as you progress in your career and earn more or when you have more children.
Con #3: Currency Exchange Spread and Risk
Typically, in Singapore right now, robo advisors tend to be heavily invested in US-based ETFs. This means your money will be subject to USD conversions at spot rates, as well as incurring currency conversion fees charged by brokers.
Con #4: The Fees
It might be ironic to say that the fees are a reason not to use robo advisors, since they are one of the draws. However, as mentioned earlier, robo advisor fees are recurring costs, which are on top of management fees. These fund-level fees or Total Expense Ratio (TER) that ETFs charge can take a big bite out of your investment returns over the long run.
If you like the benefits of what ETFs offer and are willing to put in some time and effort to do-in-yourself, then you would be able to save quite a bit, especially over the longer-term. So you need to evaluate if you really need a “purely passive” option that robo advisors provide, or can spare some time to periodically review and manage your portfolio.
Con #5: Lack of Flexibility
The whole idea of robo advisors is that you take the emotion out of investing, and that they help you to make “smart” choices based on their algorithms. However, what happens when you do not agree with the choices made by the robo advisor?
If you have a particular opinion or insight that you think isn’t picked up on by the robo advisor, then you might want to give them a miss. Also, you cannot choose a specific ETF to include (or exclude), which can be irritating, since a portion of your money is deployed in something you do not believe in.
Con #6: Tax On Dividends
Many of these robo advisors buy ETFs listed in the US, your dividends are subject to a 30% dividend withholding tax. What that means is that your dividend returns are lesser compared to buying ETFs listed elsewhere. It is unclear whether the robo advisors take this 30% dividend tax into account when doing their projections.
Try A Robo-Advisor For Yourself
Since it doesn’t cost you any thing to register and tinker around with the platforms, you should do it and see for yourself how robo-advisors allow you to easily set your risk profile, get insights into your portfolio, and project your investment returns.
If you’d like to try a robo-advisor for yourself, DollarsAndSense has partnered with StashAway, AutoWealth and Syfe to give you a headstart on your robo-investing journey.
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. You can sign-up for free today at this link.
Syfe’s special promotion: Get $10 added to your portfolio for every $1,000 invested with Syfe, up to a maximum bonus of $100. This bonus will be credited within 7 days after receiving your funds and invested together with your portfolio. To enjoy this promotion, you will need to maintain the portfolio with Syfe for at least 3 months. More details on the promotion here.
FSM INVEST Expo 2020
FSMOne.com believes in INVESTING, Fundamentally – investors should first understand the basics of investing before they get started, and it is also important for them to focus on fundamentals in the research perspective of investing.
Join FSMOne.com at FSM INVEST Expo 2020 on 18 January 2020 (Saturday) from 10am to 6pm at Suntec Convention Centre (Hall 403)!