Would you invest large sums of money on Stashaway (or any roboadvisor)? Do you have a maximum amount you would trust them with? - Seedly
Seedly logo
Seedly logo
 

Robo-Advisors

Investments

Winnie

Asked on 23 Jul 2020

Would you invest large sums of money on Stashaway (or any roboadvisor)? Do you have a maximum amount you would trust them with?

I understand that our money is kept separate in a custodian account, but if anything happens our assets will have to be liquidated in order for our money to be returned to us (like Smartly). This is unfavourable if we're investing for long-term. Considering all the risks involved, do you invest large sums of money (say more than 50k) with Stashaway or a similar product? Is anyone's entire portfolio in Stashaway? Thanks in advance!

0 comments

6 answers

Answer Now

Answers (6)

Sort By

L
Leroy
Level 3. Wonderkid
Updated on 23 Jul 2020

In the case of a insolvency, firms that co-mingle funds/assets will need take an extra processes and time before client can have their money back. Such as Smartly, StashAway, Syfe, Kristal.

Whereas firms that legally open a custodian account under your name, and with assets bought under your name are straightforward. So one could have their money back relatively earlier without “grey” areas. Such as AutoWealth, EndowUs, MoneyOwl.

When insolvency occurs, MoneyOwl offers to transfer assets to another custodian of ones choice. Similarly, EndowUs stated their clients can decide when to sell even if their firm ceases to operate. That is to say your assets are still “in the market” even if the firms closes down. I’m unsure of AutoWealth’s offering, but I reckon it to be similar.

Any company can defend and promote ones “robust” security of clients funds by having licenses. In the end, what matters is do you OWN those assets? It makes a lot of difference, psychologically and monetarily.

And yes I do invest entire portfolio in robo-firms, whereby I own those assets, and know what would happen in the worst case scenario.

0 comments

👍
5
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Hong Taa Tan
Hong Taa Tan
Level 3. Wonderkid
Answered on 28 Jul 2020

Majority of my assets are invested with roboadvisors. Based on the answers provided by the rest as well, I also feel assured investing with them.

At the same time, I do spread my risk by investing with 4 roboadvisors (Syfe, Stashaway, Endowus, Moneyowl) with an almost equal capital/weightage.

0 comments

👍
1
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Tinexxxx
Tinexxxx
Level 6. Master
Answered on 05 Aug 2020

I don’t recommend putting all your money into one Robo Advisor, it’s always better to spread it across a few Robo Advisors :)

The maximum amount I’ve ever put into 1 Robo Advisor is no more than 20% of my savings.

0 comments

👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
Brandon Lim
Brandon Lim
Level 5. Genius
Answered on 01 Aug 2020

I think that it is realtively safe to be investing large amounts of money in them

0 comments

👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post

I think this point has been answered multiple times. They keep the funds in a separate account which they have not legal access too. They are structured similarly to traditional brokerage services.

Insolvency will not cause issues unless fraud has occurred, where the money went missing in clients' accounts due to a loophole. I think beyond a certain point, you just need to go with an institution you like to invest your money, one way to diversify away from such risks is to use multiple service providers.​​​

0 comments

👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post
CH
CH
Level 7. Grand Master
Answered on 23 Jul 2020

Not more than 10% of my entire investible sum.

0 comments

👍
0
Thank You!
Can you clarify
I wonder if
This is so helpful 👍
What about
Post