facebookI have just come to know about Robo Advisors. Would like to ask if Robo Advisors or Financial Advisors would be a better choice? - Seedly
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Anonymous

07 Jun 2019

I have just come to know about Robo Advisors. Would like to ask if Robo Advisors or Financial Advisors would be a better choice?

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    Discussion (18)

    What are your thoughts?

    Hariz Arthur Maloy

    Hariz Arthur Maloy

    07 Jun 2019

    Level 15·Independent Financial Advisor at Promiseland Independent

    I'm an FA that can also distribute robo advisor options but also have his own managed portfolio service. Ultimately, it depends if you prefer passive or active management, plus if you'd like human advice on your investments instead of just a computer screen.

    I would think that human advisors do better at explaining why you need to be invested even in an economic downturn and in fact top up your portfolios, while robo advisors would not be able to calm you down during negative performances.

    Your investments are just one part of your entire financial plan as well, and having an FA handle that can also provide a more holistic view of your entire end goal.

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      Here's my personal thoughts if you are looking to invest- go with Robo Advisors. If you are looking for entire portfolio mgt advice, perhaps FAs might suit you better.

      First off understanding todays context, Robo Advisors has entered only within the past few years and been picking up traction recently, undercutting not just FAs but traditional fund managers and fundhouses in terms of attractiveness of charges. In fact, FMs and FHs and now scaling back their margins to simply stay relevant.

      Essentially, the business models of Robo Advisors has been designed to minimise the inefficiencies of existing traditional structures- going through FAs-FA's company-Investment product's company-before reaching the Fund Management Team(all of whom take a cut along the process). Of course there is the question of whether Robo Advisors perform as well as Traditional Fund Management Teams, but I believe a little researching would reveal Robo Advisors are not much worse off, if at all, to justify the hefty charges of Traditional FMTs, much less transacting bottom up through FAs.

      That being said, there is still due diligence to be done on the consumers end. There are now plenty of credible Robo Advisors in Singapore- eg. Autowealth, Smartly, Stashaway. In fact, Banks such as OCBC are catching on with RoboAdvisors of their own. My advice- look not just on their charges but beyond that, eg. the teams credibility with managing funds, whether they publish their existing portfolio track record, i.e indicators that show how their algorithms and strategies have been performing against index benchmarks. If such information is not readily available online, set up a meeting with their company team and request for these. Clarify as many queries as you have. As an potential investor, you deserve to know as much there is to know.

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        Firstly, you can look at the fees charged by both. Traditional investment advisors typically charge ...

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