What is stopping people from directly investing into the ETFs that the robos invest, instead of investing with the robos?

This comparison table between DIY, ETF and robo (Syfe is used as the example) should help answer your question and guide you to decide which is better for you :)

https://www.sgbudgetbabe.com/2020/05/is-new-syf...

Hi John,

The main advantage is, robo-advisors in general do the automatic portfolio-rebalancing for you, so you don't have to do so yourself manually.

I think it mainly comes down to convenience - robo investers are designed with new investers in mind, and a lot of emphasis has been placed on the onboarding and user experience. As a new invester, it's probably one of the fastest ways to get exposure to the market without active management.

There's really nothing stopping people from investing directly into the ETFs, in fact the fees would be lower since you won't be paying the management fees to the robo advisor.

The main downside would be that you'd have to spend your own time to manage and keep track of your investments. For example, if you're buying into 5 different ETFs, you'll have to keep track of five different funds while the roboadvisor does a decent job of summarizing it for you.

That said, I'd highly recommend that you take ownership of your own investments (even if it's a small % at the start) and not outsource the thinking. Afterall, it's an important skill to learn.

Just to add 1 minor point, Robo-advisors reinvest the dividends collected from the ETFs (if any) to get the compounding effect. Investors must do it manually in order to feel the compounding effect.