PFF Panel 2
Seedly PFF 2019
Asked by Anonymous
Asked on 02 Mar 2019
My name is Amanda and I am the Head of Client Engagement at StashAway.
We do not generally comment on our competitors and do not engage in debates on this topic online or offline. We will provide you with all the information you need on StashAway to make an informed investment decision. We also recommend investors to do their own research before deciding on a robo-advisor or an investment product.
With that said, there are a few inaccurate observations highlighted by Tai Zhi below that I would like to just clarify.
1) We completely agree with Tai Zhi's point on the fact that research has shown that active fund managers tend to underperform the market. It is true, there is a lot of data published by SPIVA that prove this point. In fact, this is something we have discussed extensively and advocate for in our seminars on investing. Let’s be clear of what this “active” vs “passive” comparison looks at: in this comparison, “active” means to participate in securities selection (buy and selling single names stocks or bonds for example), and “passive” means to buy an entire asset class through ETFs or Index Funds. We believe in passive investing: StashAway invests using ETFs which are an index-tracking investment vehicle listed on a major exchange.
Moreover, research shows that 80%+ of differential returns among porfolios come from asset allocation. This is where it makes sense to have a dynamic, strategic approach, rather than a static one. If you've read the white paper on our Investment strategy (https://www.stashaway.sg/r/stashaways-asset-allocation-framework), this is the exact basis of our investment framework. It focuses on asset allocation and not individual security selection.
When there is a fundamental change in economic conditions, StashAway will re-optimize your portfolios for you. What this means is that, for example, if the economy were to go from “good times” to a “recession”, StashAway will recommend a re-optimization that will reduce equity exposure and concentrate it in protective sectors (e.g., consumer staples), and increase allocations to asset classes such as government bonds, particularly for long maturity dates, and gold. Our investment framework (ERAA) is risk-centric: the goal is to maintain your risk exposure constant across market and economic cycles while optimizing returns.
We will always be more than happy to share details about how we've performed. If you'd like this information, you can reach out to us via [email protected] or ask our Co-Founders during the Q&A of our Academy Seminars. We are more than happy to share that with you.
2) Contrary to the belief that it "may expose the investor to a lengthy court process to claim back the assets if the robo-advisor ceases operations for some unforeseen reasons", the process at which you can claim your assets back should StashAway go bankrupt is actually quite simple.
We hold a Capital Markets Services License. We decided to get a license with stricter capital, team experience, compliance and audit requirements (vs a Financial Advisor one) as we felt that it was important to build StashAway on solid foundation that can provide the necessary peace of mind to our customers. You can read about our license on MAS website here.
To clarify, Tai Zhi writes that “AutoWealth, on the other hand, adopts an even higher level of safeguard by opening personal segregated custody accounts for each individual investor in his/her legal name so that the legal ownership is 100% clear”: they do so through SAXO, and you can check SAXO’s license on MAS website here, so that you can drive your own conclusions: both StashAway and SAXO have CMS license for Fund Management and Dealing in Capital Markets Products.
Unlike SAXO, StashAway does not have a custodial license, and that’s why our customers’ assets are protected by the custodian relationship with SAXO and their sub-custodian institutions (HSBC for cash and SG securities and Citibank for US securities), such that those funds are kept separate and un-mingled with StashAway’s finances.
3) Tai Zhi write that “Other robo-advisors like Stashaway are pure digital platform with little or no human touch.” This is incorrect. StashAway leaves the option to you- you can decide to have zero human interaction if you want, or talk with any of our Customer Engagement (CE) team members through a variety of tools.
If you're a client with us, you would know that you are able to choose to upload your documents with us via WhatsApp. In that interaction, you are talking to a CE team member who is assisting you with your onboarding. This WhatsApp feature has been available since day one when we launched in July 2017.
To make it easier for you to reach out to us, we have also started placing the WhatsApp chat feature in our mobile app last year. You will see a button at the corner of the app that allows you to quickly open up WhatsApp to speak to the CE team. When you send an email, WhatsApp, Facebook message or call us, you are speaking to an actual person from my team. For our clients, you would already know this. If you are not currently a user, you can contact us via any of the aforementioned channels, my team will be happy to answer any of your questions (https://www.stashaway.sg/contact)
If you’d like to meet our team in person, we host weekly seminars in both Singapore and KL and we are always happy to stay back for Q&A sessions. You can find the calendar on our StashAway Academy page.
I do hope the above has clarified some of the misconceptions or inaccuracies stated about us. If you'd like to learn more on any of the above points or on StashAway, please feel free to reach out to me or my team at [email protected]
I'll leave the decision to you but allow me to highlight a few differences between the two robo-advisors:
(1) Investment Strategy
An overwhelming 80% to 90% of professional investment managers who stock-pick and time markets consistently underperform the general markets in the short, medium and long-term. Read https://www.autowealth.sg/strategy.php and click on the hyperlink to see the Standard & Poors Dow Jones research which concludes this. AutoWealth takes a passive market-returns investment approach. That is fundamentally different from Stashaway, which adopts a Economic-Regime Based Model. We also note that Stashaway does not publish their investment performance on the website unlike AutoWealth.
Other robo-advisors including Stashaway adopts the "ONE omnibus custody/trustee account holding ALL clients assets" arrangement which may expose the investor to a lengthy court process to claim back the assets if the robo-advisor ceases operations for some unforeseen reasons. AutoWealth, on the other hand, adopts an even higher level of safeguard by opening personal segregated custody accounts for each individual investor in his/her legal name so that the legal ownership is 100% clear. The investor can claim his/her assets from the custodian directly without the need to go through lengthy court process. This is particularly important as there have been a negative precedent in Singapore where a MAS-licensed financial institution called MF Global went bankrupt and investors got back only a portion of their investments and only after a lengthy court process. Read: https://en.wikipedia.org/wiki/MF_Global
(3) Human element
AutoWealth assigns human wealth manager to every single client, no matter how huge or small the investment amount is. This means clients have a dedicated wealth manager to go to when they need any financial advice or need a professional to consult. Our clients often commend that "when they need advice, our wealth managers are just one whatsapp away". Other robo-advisors like Stashaway are pure digital platform with little or no human touch.
I'm a Stashaway user, you can read my review at: https://seedly.sg/reviews/robo-advisors/stashaway?rid=479#reviews&utm_source=review_share&utm_medium=internal
For a start, you can start read up Seedly review here about the different Robo: https://seedly.sg/reviews/robo-advisors
Next, read up current user review at : https://seedly.sg/reviews/robo-advisors/stashaway
This will help you understand more truth about both company/ product and decide after reading all reviews by current users besides the information on their respective website.
All the best! :)