Anonymous
The fees on most, if not all, robo-advisors are based on the AUM invested. As AUM grows, so do the fees. At which point do you guys start taking the money out to invest through broker accounts?
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Chris
21 Jun 2021
Owner and Writer at Tortoisemoney.com
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Tbh, I feel that if you don't mind the mild learning curve at the beginning, it is largely more worth it to use a broker rather than a roboadvisor.
Most robos charge anywhere between 0.6-0.8% per annum. Say you use a low cost broker, you'll incur around USD2 per transaction. As long as you invest more than USD333.33 (2/0.6%) at a time, your total comms will be less than 0.6% of your investment a year. That said, management fees continue to apply for the whole time that they hold your investments as opposed to commissions which only apply on purchases (and sales).
Even if you can't put in USD333.33 per month, you can always choose to DCA every two months instead, making your commitment effectively, USD166.66 (~SGD220) a month which should be attainable.