Best Robo-Advisors in Singapore 2024

Best Robo Advisors in Singapore 2024

How do Robo Advisors Work?

Robo advisors are a digital platform that provides automated investment advise and recommendations based on a user's personal preferences factors which include financial goals, risk tolerance, and investment strategies. These platforms utilize algorithms and software to analyse data on a large scale in order to make such recommendations. Through leveraging technology and automation, robo advisors make it easier to invest and grow wealth since they are able to offer lower fees and minimum investment required compared to traditional investment options. Whether you are a seasoned or new investor, understanding how robo advisors work and its associated fees will help you make better decisions about your investment to help you achieve your financial goals.

If you are just starting out your investment journey with robo advisors, read these articles to find more beginner-friendly tips for your questions: 

• Read the Dummy’s Guide to Investing in Robo Advisors
• Robo Advisors vs Financial Advisors? Find Out Which Is Better
• Find Out the 6 Reasons Why You Should Invest With Robos and 3 Reasons You Should Not
• Find Out Why You Are Probably Using Your Robo Advisor Wrongly

Pros & Cons of Using Robo Advisors

Understanding the pros and cons of using robo-advisors can help you make more informed decisions about your investments. Whilst robo-advisors are a convenient and cost-effective tool, there are certain drawbacks you have to consider especially when dealing with the automated and algorithmic-based nature of how robo-advisors function. Ultimately, it is the users' decision on whether to utilise robo-advisors but knowing the pros and cons will help them make the most informed decisions and perhaps even get more value out of it.

Pros

Cost-effectiveness

Robo advisors typically are more cost-efficient when compared to traditional investment options due to them being digital and automated which reduces reliance on financial advisors.

Convenience

Robo advisor users are able to access and track their investment portfolio on-demand through mobile devices or computers.

Personalization

Through the filling up of questionnaires to assess the level of risks you are willing to take as well as your financial goals which mean robo-advisor users can expect recommendations that align with their investment goals.

Transparency

Crucial investment information such as fees, charges, investment strategies, and associated risks are clearly stated for users to see and understand

Cons

Lack of Human Interaction

Typical of algorithmic-based systems, the level of personalization may not be as precise as a user would expect compared to the traditional investment methods where there are more human interactions.

Limited Investment Options

Robo advisor may not offer the full suite of investment options as traditional financial advisors which may have an impact on your overall investment strategies and potentially the returns

Lack of Flexibility

Users may not be able to customize their investment beyond the recommendations provided by the robo advisors

Overreliance on Technology

As with all digital apps and websites, it is vulnerable to bugs and glitches that might impact the user experience

What to Consider When Picking the Best Robo Advisor for You?

There are plenty of things to consider when picking the best robo advisor that is most suitable to for your investment strategy, current financial situation, the level of risks a user is willing to take, and many more.

Performance

You should also trawl the internet for reviews and look for ways to assess the track record and performance history of the robo-advisor platform of your choice so you can ascertain the suitability of the platform for your investment goals.

Ease of Use

One of the biggest draws of robo-advisor is the convenience it provides and it should be that way for the choice of your platform. Ensure that the navigation and accessibility of the different functions and content within the platform are seamless in order to make you have a good investing experience.

Customer Support

Ensure that the robo-advisor platform you choose provides good customer support to avoid delays in case you run into an issue and require it to be resolved immediately.

Security

Since using robo-advisor heavily involves the transfer of funds, be sure to assess the level of security of the platform to avoid experiencing issues that might result in the loss of your hard-earned money. You can also choose to search for historical records of security lapses if there are any to gauge the level of security the platform provides.

Read Reviews of Robo Advisors

An easy and straightforward way to find out specific features of robo-advisors available in Singapore is to read reviews and what other users have to say about them. Here at Seedly, we share our thoughts and opinions about several robo-advisors. We have also compiled in-depth information and findings after pitting the robo-advisors on the market against each other. 

• Robo Advisors Returns Reveal: Find Out Returns of StashAway, Endowus, Syfe, kristal.AI, and More
• Read the Comparison Between the Best Robo Advisors in Singapore
• Read the Review of DBS digiPortfolio
• Read the Review of StashAway
• Find Out The Performance of StashAway

What Can You Invest in With Robo Advisors?

There are plenty of investment opportunities that can be invested in with robo advisors and each comes with its own level of risks and returns. It is good practice to understand the many different products available so they can align with your investment goals. Here are some of the popular financial products available to investors using robo-advisor platforms.

Exchange-traded Funds

Exchange-traded Funds or more commonly known as ETFs are a type of investment fund that holds a basket of stocks, bonds, or other assets. Robo advisors can provide help with selecting a diversified portfolio of ETFs according to a user's investment strategy and risk tolerance.

Unit Trusts

Unit Trusts, though similar to mutual funds are divided into units that can be bought and sold on a stock exchange. With the help of robo-advisors, a user can choose from a range of unit trusts that invest in different asset classes and regions.

Bonds

Bonds are a type of fixed-income security that pays a regular interest rate and they can serve as a stable source of income due to their less volatile nature compared to stocks.

Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts or more commonly known as REITs are a type of investment fund that owns and manages income-generating real estate properties. Robo advisors can help users invest in a diversified portfolio of REITs that can provide regular dividends and potential capital gains.

Commodities

Commodities include products such as gold, oil, and agriculture. These investments can provide the user with a degree of diversification that can act as a hedge against inflation.

Different Investment Strategies For Robo Advisors

Different investors, whether budding or experts have different goals when it comes to investing their money with robo-advisors. Here are some of the more popular investment strategies for you to consider.

Passive Investing

Passive investing is the building of a diversified portfolio of low-cost index funds or ETFs that track the performance of a particular market or sector. This strategy is particularly popular in Singapore as it provides a cost-effective way to achieve long-term investment goals whiles minimizing risks.

Active Investing

Active investing is when a user selects individual stocks or funds based on market research and analysis.

Socially Responsible Investing (SRI)

Socially Responsible Investing or SRI for short is when a user invests in companies that align with certain environmental, social, and governance (ESG) criteria. There are robo-advisors in Singapore that offer SRI portfolios that focus on issues such as climate change, gender equality, and human rights.

Tax-Loss Harvesting

Tax-loss harvesting is the act of selling lost investments in order to offset capital gains and reduce tax liability.

Goal-Based Investing

Goal-based investing involves creating a portfolio tailored to specific investment goals such as saving to buy a home or for retirement.

Types of Robo Advisor Fees

Different robo-advisors commonly have different fee structures - and even then, the same robo-advisor platform might change its fee structure from time to time. It is best you understand what the many fees involved with using robo-advisors are to best pick one that is the most suitable for your investment strategy.

Management Fees

Management fee charges are calculated as a percentage of the assets under management (AUM). The amount covers the cost of managing the investment portfolio and the amount commonly ranges from 0.25% to 1% per year, covering the cost of managing the investment portfolio and it varies depending on the investment strategy and the amount invested.

Platform Fees

The platform fee covers the cost of using the robo-advisor platform. This amount can be a fixed monthly or annual fee and it can aso be a percentage of the assets under management.

Trading Fees

Withdrawal fees are sometimes charged by the robo advisors for the withdrawal of funds from the investment account - this amount can be a percentage of the withdrawal amount or a flat fee.

Account Minimum Fees

Users may be charged by some robo-advisors if their account balance falls below a certain minimum threshold - this fee can be a percentage of the account balance or a fixed monthly or annual fee.

Robo Advisor Recommendations for Investors of Skill Levels

Not all robo-advisors are created equally. Here is our take on which robo-advisors bests suit the different profiles of investors. 

Best Robo Advisor For Beginners

For entry-level investors who are looking to dip their toes into the world of investing, these robo-advisors are ideal because of their fees and low to no minimum investment amount.

With almost no minimum investment amount, these platforms are great low-risk, and low-commitment options for newbies to test things. Furthermore, these platforms have a relatively intuitive interface that also makes investing less complex for beginner investors. 

Best Robo Advisor For Hardcore Investors

For investors with more experience, these platforms offer more sophisticated products that may be right up your alley.

There is a significant stipulated minimum investment amount compared to the above four robo-advisors for Endowus, AutoWealth, and SaxoWealthCare. Furthermore, both Endowus and Kristal.AI offer investment products that are more complex with the option of customising your portfolio. So this may be good news for seasoned investors!

Frequently Asked Questions for Robo Advisors

Can you lose money with robo-advisors?

Yes, just like any investment, it is possible to lose money when investing with robo advisors. However, a good way to mitigate risk and losses is to diversify your portfolio on top of assessing the risk and returns of your investment strategy and each financial product you are hoping to invest in.

Do robo-advisors beat the market?

Robo-advisors operate based on the user's investment goals and risk tolerance with a focus on passive investing strategies such as investing in index funds and ETFs. This method aims to replicate the performance of a benchmark index so investment using robo-advisors seeks to provide market returns instead of beating it. There are however possibilities of a higher rate of returns but it usually comes with higher risks.

Disclaimer: Products with a "Visit Site" button pay to access additional features

• Provides option to spend or transact in foreign currencies at FOREX/Interbank rates
• Auto or partially automated portfolio asset allocation