How can a person who is uninitiated in investing start investing with these robo-advisors? What is the catch behind them and what are the risks? - Seedly
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Asked on 29 Apr 2019

How can a person who is uninitiated in investing start investing with these robo-advisors? What is the catch behind them and what are the risks?

I'm totally new to investing and I so I'm looking for something more passive. Don't see myself trading stocks. Hence I was more interested in starting with Robo-advisors. What are the pros and cons when investing in Robo- advisors?


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Chuin Ting Weber
Chuin Ting Weber
Level 5. Genius
Answered on 30 Apr 2019

Hi Anonymous,

Thank you for your questions. This is Chuin Ting, CEO/CIO of MoneyOwl. Perhaps as a panellist in the event, I am deemed to be an interested party in relation to your question (though at the risk of sounding like a broken record, MoneyOwl is not a pure investment-only roboadvisory but a bionic - human + tech - adviser & a comprehensive adviser). But if you don't mind let me share some suggestions.

First of all, kudos to you for being open about where you are in investing experience and at the same time recognising that one need not follow the "rage" which seems to be in roboadvisory investing at this moment.

Over the past 2 years, Singaporeans have seen quite a number of investment roboadvisors being launched. The roboadvisor fever really started in the US when a company called Betterment launched their online investing service in the US in 2010. Note that this is after the Global Financial Crisis of 2008-9. Which means that roboadvisors are largely untested in times of severe market downturns and has been in a decade-long boom. How will roboadvisors respond in such a situation? Can technology solve the problem when fear is prevalent? This is something to think about.

To understand more about each roboadvisor, perhaps you can approach it from a few angles.

First, what the roboadvisor actually does. I have heard the comment that some “roboadvisors” are more robo-enabled portfolio tools or portfolio managers than advisers. What is it that you are seeking and what do you value?

Second, what is the thinking behind the way the portfolios are constructed and managed. This is about investment philosophy, which can differ quite significantly even if the underlying instruments appear to be similar. Investing comes with risks, but seek to understand the evidence about the markets and how each advisor understands risks.

Third and maybe most importantly, who are the people behind the technology? Before you can invest with anyone, roboadvisor or not, you need to be able to know that there is indeed no "catch". Trust - both in terms of competence and trustworthiness - will be key to your having a good experience not just in any relationship with you advisor, but to your own chances of investing success as well.

All the best!


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Bryan C.
Bryan C.
Level 3. Wonderkid
Answered on 11 Oct 2019

Hi Anonymous!

To answer your question, I think that most robo-advisors do the job of assessing your current financial position and recommend a portfolio strategy after reviewing your risk profile. As for the "catch", I would say that robo-advisors are still not very different from your ordinary financial advisors as both options will still have a management fee incurred for users. The difference lies with the amount, as robo-advisors have lower management fees. You can check out Kristal.AI ( as they have no management fees for investment amounts lower than $50 000.

Practically speaking, robo-advisors replace that human element that traditional financial consultants would provide with an AI system. Depending on your preference, that may or may not be a disadvantage/con for you. There are also a plethora of robo-advisors and some do not rely solely on AI/technological capabilities and retain the human element (see Kristal.AI).

Hope that answers your query!


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