Is it wise to withdraw funds in Robo account and DIY?

Hi Anon,

I believe what Chris has mentioned about your returns is correct!

But if your concern is more about being able to earn more profit due to lower fees if you DIY, then that's correct to an extent. Let's say that you are investing with Syfe and currently paying 0.65% in fees. If you switch to DIY, the expense ratio you will be paying for your ETFs will be lower than this. In that sense, you will be able to pay less in fees and thus possibly have higher returns. But do take note of the commission fees involved with buying ETFs when you DIY - if you plan to DCA monthly, it may not be so wise especially if you plan to replicate the entire Robo portfolio due to the large number of ETFs they tend to hold. I would recommend just buying the main ETFs that make up the portfolio, although as Chris has mentioned, you will lose some diversity.

Hope this helps!

Regards,

thefrugalstudent

I understand your thinking, but actually, there's no difference (if we assume the robo to be holding only 1 stock).

Say you invested 10k into a robo (imagine it as 10 shares of $1k each) and you withdraw it with 2k of gains (meaning total you have 12k, with each share sold at $1.2k). You invest that into the market now, you'll still be able to get 10 shares with each share at $1.2k. The only difference is that in the robo, your 'cost price' is $1k and in the DIY, your 'cost price' is $1.2k. But ultimately, it's the same, because if the investment goes up 10% from here, regardless of which way you choose, it'll go up to $1.32k per share and your total returns would be the same. Hence, the difference is psychological.

That being said, I would not discount the additional diversification that a robo can provide, especially if your account is small.​​​