Investments are an excellent solution to increase your income. Aside from your full-time job, they contribute greatly to your passive income. Of course, there are other ways to generate passive income and you can read about them here.
Traditionally, these investments demanded either a lot of money to hire a broker or a lot of research. People who invested their money had to analyse the market, choose a portfolio, anticipate risks, and weigh each potential asset.
As you can imagine, this endeavour eats hours per week. That’s why investments were the privilege of people passionate about finances.
Not many people can say their hearts skip a beat when it comes to financing, right?
Enter robo advisors. These platforms offer top-notch digital tools so that you can invest your money wisely, according to your needs. Plus, many of them provide broad access to literature so that you can learn more about finances.
Want to find out more about robo advisors in Singapore? Keep reading.
What Is A Robo Advisor?
Robo advisors work just like brokerage agents that help manage your funds. You’ll work on a digital platform, which has access to expert algorithms.
These algorithms tell you where to invest your money and how to diversify your portfolio.
There are many advantages to small-time or beginner investors. For example, you will benefit from lower fees and invest less money.
Here’s why:
These algorithms that robo advisors use are cheaper than hiring real people. As these platforms are more affordable, they also can impose smaller fees.
Besides, you don’t have to be actively involved in managing your investments. You can rely on your robo advisor to show you the right assets. Of course, you’ll have to set your objectives and risk appetite.
Plus, these user-friendly platforms are very intuitive.
If you’re like most people, you’re probably cautious about robo advisors. Do they work? And are they better than people?
However, remember that people create these platforms and their algorithms. They follow strict instructions and help you invest in the same assets based on thorough market research.
Over time, a substantial amount of savings will be generated and it can contribute to your next staycation or getaway.
How Do Robo Advisors Work?
If you’ve decided to use a robo advisor, here are the approximate steps before you start investing:
Step 1: Sign up
Step 2: Fill in info regarding your risk appetite and investment timeline.
Step 3: Add cash. You can select a lump sum or add more every month.
Step 4: The robo advisor will offer one or multiple portfolio ideas. These portfolios are usually various ETFs, bonds, and REITs, depending on the platform.
Step 5: You choose the right plan for your needs or personalise one of the robo advisor’s suggestions.
Step 6: The platform keeps track of the market’s evolution. Therefore, it customises your portfolio continually according to risks so that you can have higher revenues.
What Are The Robo Advisor Platforms Available In Singapore Today?
| Robo Advisor | Minimum Sum | Advisory Fees Per Year |
|---|---|---|
| Endowus | $10,000 | 0.25-0.4% |
| MoneyOwl | $50 / month or $100 lump | 0.5-0.6% |
| DBS digiPortfolio | $1,000 | 0.75% |
| Autowealth | $3,000 | 0.5% |
| StashAway | $0 | 0.2-0.8% |
| Syfe | $0 | 0.4-0.65% |
| UOBAM Invest | $1 | 0.6-0.8% |
| UTrade Robo | $5,000 | 0.5-0.88% |
| FSM Maps | $500/ month or $1,000 lump sum | 0.35-0.5% |
| Kristal.AI | $0 | 0-0.3% |
| OCBC RoboInvest | Starting at $100 | 0.88% |
Endowus
Endowus works on a fee-only basis. This platform is popular for quality algorithms and customising portfolios.
Endowus is the right choice for beginners because it works with top funds, and it’s affordable. Plus, it allows you to diversify your portfolio with international stocks.
Here’s its unique selling point: it features institutional share classes.
Plus, you can use it for CPF or SRS investments.
MoneyOwl
MoneyOwl offers you investments in funds as well. Many Singaporeans work with MoneyOwl because it’s much cheaper than other platforms if you consider the minimum required sum.
Therefore, anyone has access to it.
Another advantage is that you can choose one of its five portfolios according to your risk appetite and goals. Besides, this platform gives you access to lots of literature. For example, you can learn better money management and how to write insurance docs.
DBS digiPortfolio
This DBS platform allows you to invest in Asian or international ETFs. DBS selects the most trustworthy funds listed in the Singapore and UK market.
You can use two currencies to buy a portfolio: SGD and USD. Therefore, you’ll need to open a multi-currency account. However, DBS digiPortfolio has multiple plans to choose from.
Although the minimum investment amount is a bit high at $1,000, you won’t have to deal with other fees.
AutoWealth
AutoWealth gives you access to top-notch equity and bonds. The two indices that AutoWealth is using are NYSE and NASDAQ so that you can rely on their quality.
Another advantage to newbies is getting the help of an expert agent. This person manages your account and takes your calls.
On the downside, the minimum investment amount on AutoWealth is $3,000.
StashAway
StashAway takes the limelight of Singapore’s robo advisors. This platform distributes your assets based on an algorithm that follows economic cycles in the market.
That’s why we recommend StashAway to people who have low-risk appetites.
Their intuitive platform is another advantage. StashAway offers multiple portfolio plans depending on your goals, income, age, and more. Plus, you can tweak these plans whenever you want. StashAway will do the same thing according to emerging market trends and risks.
StashAway is a favourite choice among beginners because it lacks a minimum investment sum. Also, its advisor fees are low.
Syfe
Syfe is a direct competitor to StashAway. However, Syfe offers a more diversified portfolio that includes REITs, curated ETFs, and equity. Another advantage is Syfe’s lower fees for small sums under $25,000.
That said, these platforms are best for different purposes.
Syfe is best for long-term investments, whereas StashAway is better for short or mid-term investors.
Also, Syfe has some unique portfolios in Singapore. One of these options is the REIT-only investment opportunity.
These platforms use different algorithms, as well. Syfe’s Automated Risk-managed Investments allows automatic risk adjustments.
UOBAM Invest
UOBAM Invest compares to StashAway and Syfe because its minimum investment is $1. Plus, its annual fees for sums below $25,000 are 0.8%.
UOBAM invest is one of UOB’s platforms and the young kid from the block. The algorithm it uses is called Glide-path.
This metaphoric name suggests that your funds will glide on reliable paths toward safe investments. UOBAM Invest takes your goals and due date to allocate these assets.
UTrade Robo (UOB Kay Hian)
UTrade Robo is more expensive than its previous competitors. You’ll need at least $5,000 to start investing, which means this platform addresses serious investors.
The advantage is you have more choices. You can diversify your portfolio with Singapore and international assets. You can choose a wide array of low-cost and trustworthy stocks, bonds, and equity, including the best global ETFs.
UTrade Robo is an efficient advisor because it bases its algorithm on the Modern Portfolio Theory. Therefore, it can accurately determine the maximum revenues you can expect for each asset at specific risk levels.
FSM MAPS
FSM MAPS isn’t free, but it’s more affordable than UTrade. As such, you only need $1,000 to start investing in your Lump Sum plan. Otherwise, you’ll need $500 for your Regular Savings Plan.
The fees are smaller too, compared to its competitors above. As such, you’ll only have to fork out 0.35% for the Conservative portfolio and 0.5%/ year for the others.
But here’s FSM MAPS’ unique selling point:
You can consult with your portfolio manager before making a decision. Besides, this platform doesn’t rely solely on automated algorithms; it also employs expert research analysts.
Another advantage is that you can choose one of the ten portfolios available, so you have plenty of options.
Kristal.AI
Kristal.AI is best for people with minimal budgets. You don’t need any minimum investment sum, and fees are 0% for sums below $10,000. If you can invest more than $10,000, you’ll only pay 0.3%/ year.
Besides, this platform sports a specific account for general investors and one for accredited investors.
However, you can only invest in ETFs if you choose Kristal.AI.
That said, its investment strategies are based on thorough research. Its algorithm includes:
- Market movements
- Target volatility
- Risk limits
- Investment preferences
OCBC RoboInvest
OCBC RoboInvest allows you to allocate your funds with individual stocks and ETFs. You’ll need at least US$100 to start your investing journey, and you’ll pay 0.88%/ year on advisory fees.
However, not all portfolios are available for $100. For example, some tech stocks can cost over $50,000.
We recommend this platform if you want more options when it comes to investments. OCBC RoboInvest features:
- 34 thematic portfolios
- Six risk tolerance levels
- Investing in individual stocks according to the theme you prefer
Is It Good To Use Robo Advisors? What Are The Pros And Cons Of Robo Advisors?
If you’re still undecided on whether to use a robo advisor, let’s review the pros and cons below:
| PROS | CONS |
|---|---|
| 1. Most platforms require a small sum to get you started with investments. Besides, many robo advisors keep their fees competitive. | 1. You may let panic cloud your judgment when making a transaction. |
| 2. Robo advisors are high-tech. Therefore, they can keep track of all market indicators to strategise your investments. | 2. You may disregard increasing your investment fund if you start earning more money at work. That’s because you’re relying too much on the robo platform. |
| 3. You can diversify your portfolios based on various variables, such as your income and goals. | 3. Many robo advisors invest in US-based ETFs, which have higher taxes. |
| 4. You can take a passive approach to your account. Once you’ve set your portfolio, the robo advisor can automatically adjust it according to market conditions. | 4. Although advisory fees are low, some robo advisors feature other charges too. These recurrent payments can hamper your budget. |
| 5. You don’t have full flexibility to personalise your portfolio, for example, if you want to include a particular ETF. |
Never put all your eggs in one basket. Remember to diversify your investments. However, if you are in a tricky financial situation where you need money urgently, you can sign up for a loan within 3 minutes right here.
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