How do I manage high transactional cost when investing in a roboadvisor? - Seedly
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Anonymous

Asked on 05 Aug 2020

How do I manage high transactional cost when investing in a roboadvisor?

I am currently investing in an overseas roboadvisor. However, every transaction costs me about 60USD due to intermediary bank fees.

For example, I make a transfer of 1000USD. However, only 940USD will be invested after the fees. This means that my investment will have to rise 6% to break even. This is definitely not ideal.

Would it better if I try and accumulate 6000USD to reduce the fees percentage rate to 1% or is there a better solution? Any advice is welcomed, thank you.

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Gordon Lim
Gordon Lim
Level 5. Genius
Answered on 05 Aug 2020

If it has to be this roboadvisor, then you’ll just have to accept their pricing. With such high transactional costs, I doubt this roboadvisor “supports” dollar cost averaging for sums below $6000. Are there really aren’t any other roboadvisors offering a similar portfolio? Perhaps you could share the roboadvisor/portfolio and the community can advise you on cheaper alternatives.

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Andy Chan
Andy Chan
Level 5. Genius
Answered on 05 Aug 2020

Generally the existing roboadvisors in Singapore are more cost efficient than the one you're investing in. May I know why you're investing in an overseas roboadvisor?

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Gordon Lim
Gordon Lim

05 Aug 2020

Hi Anon, I just checked out their site. I had a misunderstanding. I thought the high cost was from the roboadvisor. May I then ask how you are making deposits. Then we can look at cheaper alternatives for that purpose.
E
Eman

10 Aug 2020

Apologies for the late reply. I’m using TransferWise currently
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