Hi Sam, honest question. How much % of one's individual portfolio should be allocated to robo-advisors?

Hi Nigel, thank you for the question.

I would first think about how much of your overall portfolio you're looking to allocate to your "core" investment portfolio. The purpose and best use of Endowus as a wealth platform is to manage your Core Wealth - the core passive srategic asset allocation to equities and bonds, that give you globally diversified exposure and at the lowest cost achievable. In that sense, I would typically allocate at least 70~90% of my investment portfolio to core assets. Robo-advisors or investment platforms are a tool to help you reach your goals.

If the concern is safety and security of the platform, then you should do your homework on the platform before allocating any funds to it. Some key questions to ask are: How are client assets held? Is the robo-advisor licensed by the Monetary Authority of Singapore? Who am I sending money to? What happens to my assets if the platform ceases to operate for any reason? Any legitimate digital wealth platform has to be licensed by the Monetary Authority of Singapore (MAS) as either a Financial Advisor or a Capital Market Services Provider, which means that they undergo yearly audits, ensure that they keep to certain capital requirements, and keep clients’ cash and investments separate from their own business’s cash and investments.

At Endowus, client assets are held in your own name at Endowus and at Endowus' partner custodian UOB Kay Hian, Singapore's largest broker. When you open an Endowus account, a UOB Kay Hian account is also opened in your own name for added security of your transactions and assets. Read more here about the safety and security of the Endowus platform.

I think we should, ideally, have an investment strategy first then have robos as an aggregator of different assets. Think of robos like a brokerage but with an added feature of advising an asset allocation based on indicated risk profile to save you the trouble of choosing what to buy.

For example, you may want to have a 60-40 allocation of equities and bonds respectively. If you combine all your holdings from robos and other portfolios, the weightage should not differ significantly from the target. If it does, rebalancing needs to be done.

They can go 20% or even 100% (personally would diversify) so long as they keep to their target allocation as whole.