AMA Investment Moats
Asked on 02 Jul 2018
Interested to know more about the Robo Advisory market
The market concentration of Robos in Singapore isn't very high due to its lack of track record, but they're slowly gaining ground. They work well with some insurance companies, banks and financial bloggers. It's likely that it will continue to take market share from active funds, due to the popularity of ETFs every year.
Client base is largely focused around people who prefer a personalized investment plan with easy access on their phone - younger people in their mid 30s and below tend to be the focus, with some exception in older folk in their 50s who like to try new things and diversify, though their emphasis is still more on SSBs and bank plans.
AUM continues to grow, but you can probably look it up online.
The main barriers to entry are 1) access to overseas and local ETFs seamlessly (the emphasis being seamless) through an app. 2) MAS approval. Okay probably this is the biggest one. MAS approval pretty much lets you do anything you like, because you've passed all the ridiculous prerequisites in terms of AUM, credibility, etc.
I think one of my biggest complaints about the Robo market as it stands is they only invest in efficient markets at the moment, and quite frankly speaking you can enter those markets at a lower cost. Quite frankly speaking, even with active funds, dumping money in inefficient markets like China and India would make way, way more money over time despite the higher fees, so...meh.
Read about the main players, client base, AUM even back test at:
More info and review by existing customer at seedly product review:
The robo advisory market here is still rather in its infancy stage, as they only started out last year or so. Main players here are stashaway and auto wealth, both with its own algorithm when it comes to selecting the etfs to fit your profile. Main barriers to entry I'd say are getting MAS approval to operate here (with a lot of stringent criteria) and also developing the robo advisory model that will fit the investment strategy you have. Both will involve high costs. As Luke said, you can buy into the same etfs as the ones recommended via your selected robo advisory platform, and it'll likely be cheaper. But the thing is actively managing it on your own throughout your investment horizon. Won't be easy unless you already have a strategy in place.