Robo-advisors are digital platforms created by humans which provide investment services with little to no human supervision as they are algorithm-driven. A typical robo-advisor collects information from clients about their financial situation and future goals through an online survey and then uses the data to automatically invest client assets. In Singapore, there are 5 robo-advisors you can choose to invest with. They are Smartly, Autowealth, Stashaway, MoneyOwl and Endowus. Although they might seem like they were started for the same purpose, there are differences which sets them apart from one another. We will examine them later on.
I think that it is important to note that Robo-advisors is not really an asset class contrary to popular belief. Asset classes include stocks, bonds, ETFs, Unit Trusts, REITs and property. By using Robos to invest, you are effectively tapping on a platform so that you can invest in certain asset classes as compared to if you were to hire a financial advisor to do it for you or even DIY. Using robos enables you to adopt a low cost, diversified, passive approach especially since you are letting the algorithm invest for you. Instead, Robos act as platform so that you can invest in certain asset classes as compared to if you were to hire a financial advisor to do it for you.
Now to address your question, whether robo-advisors are something that should be considered now, it ultimately voices down to what type of person you are. If you feel that you are somebody who is relatively new to investing, investing for the long term and lastly don’t have alot of time to choose and pick your stocks individually (more passive way of investing), then I feel that you CAN consider Robo-advisors. However, please still do your own due diligence.
Let’s compare between robo-advisors and human advisors before diving into the pros and cons.
- Low cost :The main advantage of robo-advisors is that they are low-cost alternatives to traditional advisors. By eliminating human labor, online platforms can offer the same services at a fraction of the cost. Robo-advisors thus charge a lower fee than a human advisor.
- Services: The services offered by a robo-advisor is usually only investments. However for human advisors, they usually provide a wider range of services like financial planning etc.
- What type of people they are for:
Here are some of the pros and cons of associated with using robo-advisors to invest.
So now that you know more about robo-advisors, let’s look at what robo-advisors are there that are available for you to invest with. In Singapore, there are 5 robo advisors. They are
- MoneyOwl
- Endowus
- Smartly
- Autowealth
- Stashaway
Here’s some history and their investment philosophy
MoneyOwl
History: Started in 2018 as a social enterprise and a joint venture between NTUC Enterprise Co-operative Limited and Providend Holding Private Limited, currently led by Chuin Ting Weber, CEO and CIO of MoneyOwl (previously DIY Insurance). Has other functions other than just being an investment robo.
Investment philosophy: Building of Global portfolio via Dimensional Fund Advisors (DFA) & iFAST as the platform
Endowus
History: Started in 2017, led by Samuel Rhee, former CEO and CIO of Morgan Stanley Investment Management Asia.
Investment philosophy: Building of Global portfolio via Dimensional Fund Advisors (DFA) & PIMCO fund
Stashaway
History: Started in 2016 by ex ZALORA Group CEO, Michele Ferrario, ex Nomura MD, Freddy Lim and CTO Nino Ulsamer
Investment philosophy: A proprietary investment strategy called the Economic Regime-based Asset Allocation (ERAA) which continually monitors economic and market cycles to rebalance accordingly.
Smartly
History: Started in 2015 by ex start-up professional, Keir Veskiväli and Investment Analyst, Artur Luhaäär
Investment philosophy: Modern Portfolio Theory (MPT) consisting of ETFs that efficiently capture the global stock markets as well as give exposure to bonds and real estate.
Autowealth
History: Started in 2015 by ex Investment Banker at government firm, Ow Tai Zhi and ex Management Consultant, Noel Lee
Investment philosophy: A rule-based investment approach and strategy which places a strong emphasis on diversification across major asset classes, geographical regions, and industries.
Should you need to take a look at the full comparison among the 5 robos, we have one here and also a video with the 5 different heads of the respective robos. Different robos have different investment methodologies as seen above. Although the robos are the one that is helping you invest, it will be good to understand the investment methodology of the different robos so that you can choose the one that best fits what you prefer. As always, the information as seen above is there to give you some background on the different robos in Singapore. Please do your own due diligence before deciding which robo advisor to invest with should you choose to use robo advisors.
Robo-advisors are digital platforms created by humans which provide investment services with little to no human supervision as they are algorithm-driven. A typical robo-advisor collects information from clients about their financial situation and future goals through an online survey and then uses the data to automatically invest client assets. In Singapore, there are 5 robo-advisors you can choose to invest with. They are Smartly, Autowealth, Stashaway, MoneyOwl and Endowus. Although they might seem like they were started for the same purpose, there are differences which sets them apart from one another. We will examine them later on.
I think that it is important to note that Robo-advisors is not really an asset class contrary to popular belief. Asset classes include stocks, bonds, ETFs, Unit Trusts, REITs and property. By using Robos to invest, you are effectively tapping on a platform so that you can invest in certain asset classes as compared to if you were to hire a financial advisor to do it for you or even DIY. Using robos enables you to adopt a low cost, diversified, passive approach especially since you are letting the algorithm invest for you. Instead, Robos act as platform so that you can invest in certain asset classes as compared to if you were to hire a financial advisor to do it for you.
Now to address your question, whether robo-advisors are something that should be considered now, it ultimately voices down to what type of person you are. If you feel that you are somebody who is relatively new to investing, investing for the long term and lastly don’t have alot of time to choose and pick your stocks individually (more passive way of investing), then I feel that you CAN consider Robo-advisors. However, please still do your own due diligence.
Let’s compare between robo-advisors and human advisors before diving into the pros and cons.
Here are some of the pros and cons of associated with using robo-advisors to invest.
So now that you know more about robo-advisors, let’s look at what robo-advisors are there that are available for you to invest with. In Singapore, there are 5 robo advisors. They are
Here’s some history and their investment philosophy
MoneyOwl
History: Started in 2018 as a social enterprise and a joint venture between NTUC Enterprise Co-operative Limited and Providend Holding Private Limited, currently led by Chuin Ting Weber, CEO and CIO of MoneyOwl (previously DIY Insurance). Has other functions other than just being an investment robo.
Investment philosophy: Building of Global portfolio via Dimensional Fund Advisors (DFA) & iFAST as the platform
Endowus
History: Started in 2017, led by Samuel Rhee, former CEO and CIO of Morgan Stanley Investment Management Asia.
Investment philosophy: Building of Global portfolio via Dimensional Fund Advisors (DFA) & PIMCO fund
Stashaway
History: Started in 2016 by ex ZALORA Group CEO, Michele Ferrario, ex Nomura MD, Freddy Lim and CTO Nino Ulsamer
Investment philosophy: A proprietary investment strategy called the Economic Regime-based Asset Allocation (ERAA) which continually monitors economic and market cycles to rebalance accordingly.
Smartly
History: Started in 2015 by ex start-up professional, Keir Veskiväli and Investment Analyst, Artur Luhaäär
Investment philosophy: Modern Portfolio Theory (MPT) consisting of ETFs that efficiently capture the global stock markets as well as give exposure to bonds and real estate.
Autowealth
History: Started in 2015 by ex Investment Banker at government firm, Ow Tai Zhi and ex Management Consultant, Noel Lee
Investment philosophy: A rule-based investment approach and strategy which places a strong emphasis on diversification across major asset classes, geographical regions, and industries.
Should you need to take a look at the full comparison among the 5 robos, we have one here and also a video with the 5 different heads of the respective robos. Different robos have different investment methodologies as seen above. Although the robos are the one that is helping you invest, it will be good to understand the investment methodology of the different robos so that you can choose the one that best fits what you prefer. As always, the information as seen above is there to give you some background on the different robos in Singapore. Please do your own due diligence before deciding which robo advisor to invest with should you choose to use robo advisors.