Will Moneyowl consider a cheaper fund platform like Endowus? - Seedly
 

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Asked by Anonymous

Asked on 10 May 2019

Will Moneyowl consider a cheaper fund platform like Endowus?

Moneyowl fees range from 1.15%-1.21% p.a., depending on portfolio. This includes 0.65% p.a. advisory fee, 0.18% p.a. platform fee, and between 0.32%-0.38% p.a. for the fund expense ratio. If cheaper fund platform is used, the fees can drop to less than 1%, which is cheaper than Endowus. Will this be considered?

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Chuin Ting Weber
Chuin Ting Weber
Level 5. Genius
Updated on 13 May 2019

Hi Anonymous, the third-party platform fee is totally passed through to iFast who acts as custodian/transfer agent. We have negotiated the fees to be as low as possible. In choosing our partners, besides the costs, we have also looked at a variety of other factors including technology capability, track record and experience in operating with large numbers of retail clients. These capabilities are important given our target market and small investment thresholds of $100 one-time/ $50 monthly, and the need for significant integration that is needed to make the user experience as seamless and operationally error free as possible. In my opinion, it would be remiss of us to look only at headline costs without considering the potential costs or issues to clients related to operational risks. That said, we are constantly on the lookout for suitable partners who are competent and who can add value to our clients and we are not at closed to making adjustments as necessary.

Actually, we are not really wanting to have a “price war” which will harm everyone and ultimately investors if business becomes unsustainable. Allow me also to reproduce partly what my colleague Harry Ch’ng, MoneyOwl CFO & SVP, Investment, has said in response to another question on costs:

We may not be the lowest-cost adviser - we do not aim to be so, and in fact the lowest cost option is DIY investing. Rather we aim to keep costs low enough to give investors a good return on their investments, while adding value through advice. Our advice is firstly, bionic, i.e., not just digital/robo but also human, and we have a team of advisers who can help clients especially through risk coaching to stay invested when times are turbulent. Our advice is also not just on investment, but comprehensive - we already have insurance and will-writing and soon we will integrate CPF planning in our comprehensive planning offering. Finally, we are confident to bring our services to our clients not just because we believe we have the right investment philosophy and process to deliver results to our clients, we also have the right people and resources behind the technology — as a JV between NTUC Enterprise and Providend, we bring a unique combination of mission for the ordinary man in the street and long-standing expertise in financial advisory, to journey with you into the long term.

Thank you again for your question and your suggestion — we will definitely take heed.

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