How safe is it to store the money in Robo-Advisors such as Syfe, StashAway as compared to banks and insurance companies. What will happen to your money if these companies go bankrupt? - Seedly
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Anonymous

Asked on 26 Feb 2020

How safe is it to store the money in Robo-Advisors such as Syfe, StashAway as compared to banks and insurance companies. What will happen to your money if these companies go bankrupt?

I have money currently in stashaway simple. But I'm a little concern about the risk involved.

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Hi HeYuan! At Syfe, the security of your funds and investment holdings is of utmost importance. We are licensed by the Monetary Authority of Singapore (MAS) and we hold a Capital Markets Services (CMS) License for retail fund management.

Funds in your Syfe account are held in a Trust Account in DBS Bank while your investments are held in a Custodian Account through Saxo Capital Markets. Your money and assets are always held separately from Syfe's assets. This means that Syfe will never be able to use your funds and assets, even in the very unlikely event that Syfe stops operating. As such, you’ll always have a claim on your investments.

What’s more, as a CMS license holder, we have met all the stringent requirements and standards set by MAS to prevent a bankruptcy event from happening, and to keep our clients’ funds and assets safe. This includes meeting the minimum capital requirement to ensure that Syfe has sufficient daily cash flow to meet all operational needs.

In the unlikely event of a closure, we will ensure that your money is returned to you as soon as possible, although transferring your holdings to CDP is currently not available. Your interest will remain the primary focus for us.

On this point, kindly note that all clients are free to withdraw their money any time with Syfe. Syfe does not impose any exit penalties or lock-in periods, so clients are genuinely able to access their money any time.

Since our launch, Syfe has grown to become one of the larger digital wealth managers in Singapore. You can be assured that your funds and investments are in safe hands. We are backed by leading VCs and investment professionals not just in Asia, but across the globe. ​​​

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HeYuan Chen
HeYuan Chen

28 Apr 2020

Hi. I read online . The robo advisor tt recently ceased operation also had their holding in custodian but were given a deadline to sell off e asset?
Yang Teng
Yang Teng

28 Apr 2020

You can take a look here: https://seedly.sg/questions/why-did-the-smartly-robo-advisor-close-down-anyone-knows-what-happened-and-will-there-be-more-to-come
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ty

ty

Level 2. Rookie

Answered on 04 Apr 2020

Can what happened to Smartly happen to Syfe as well? Correct me if I'm wrong, but I understand that some Smartly customers had a lot of issues claiming back their assets after what happened?

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MT2020

MT2020

Level 7. Grand Master

Answered on 06 Mar 2020

The money in robo advisor is being stored at a custodian or trust account. So in the event that the robo advisor closes down, your money will not be touched and will be return back to you.

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Rais M

Rais M

Level 7. Grand Master

Answered on 27 Feb 2020

In order to assure us that our money is safe, these companies would usually say that your money will be held in a trust or a custodian account. So in the event the company close down, your money are still held within the trust/custodian account and will be safe from creditors. Similarly, since your money are in a trust, they are also not able to abuse and use your money for other purposes.

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Quoted from Stashaway website directly:

"Your deposits first go to a DBS trust account. Then, your purchased securities go to a custodian account through Saxo Capital Markets. Even in an unlikely bankruptcy event, any money held in a trust or custodian account can’t be touched, as they belong to you – not to us."

Hope this helps!

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This depends on the company, for cash there is mostly a capped default cover guaranteed. Stocks and ETFs you bought however are your property even when the broker goes broke, normally.

this is not valid though for ETNs (exchange traded notes), certificates or CFDs, cave.

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