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Choosing A Financial Advisor: Robo-Advisors VS Human-Advisors

profileJunel Seet

In this day and age, we’re spoilt for choice. Fund managers are no longer limited to Human Financial Advisors, there are also automated Robo-Advisors that can do the same job at a lower fee.

If you are still unsure about what exactly Robo advisors are, they basically offer low-cost diversified passive investing where algorithms help recommend you stocks and manage your portfolio.

Main Differences Between Robo-Advisor And Human Advisor

Fees0.3% - 1% of total invested per year1% - 2% of total invested per year
ServicesManages investmentsManages investments + More specialised services (Eg. Tax advice, Estate planning)

Wholistic financial planning
Good for- Beginners
- Less complicated investments 
- "Lazy" Investors
- Experienced investors with more assets
- More complicated investments 
- Prefer flexibility and control of investments

How To Choose?

Here are some factors to consider when choosing the best robo advisor.

1. Fees

The more straightforward differentiating factor between Robo-Advisors and Human Advisors would be its service fees.

Robo advisors charge less in general. They typically charge 0.2% to 1% of your total amount of money invested per year. Some charge upfront fees, performance fees, platform fees and brokerage fees. Do understand the costs before delving into it.

Human Financial Advisors typically charge 2% to 3% of your total amount of money invested per year. Higher costs are for more one-to-one, personalised services

2. Services

Robo-Advisors and Human Advisors offer the same basics but still differ in terms of a wider range of services. Decide for yourself if you simply want investment management or more holistic planning.


Robo-advisors usually put your investment money into a basket of Global Exchange Traded Funds (ETFs) which exposes the fund to the global economy in different sectors in some form of a mix of equities and bonds. Some of these ETFs are not available to retail investors.

They are great at using algorithms to automatically buy and sell assets, rebalancing your portfolio over time rather than trying to beat the market.

Human Financial Advisors

Human financial advisors provide your basic investing too but allow for a more tailored, specialized experience. They additionally provide services such as estate planning and tax advice if you need them. If you want an advisor to be able to diagnose your personal financial problems and opportunities for improvement and not just something for the masses, this may be a better option.

If you want to use your CPF or SRS to invest, you cannot do so with robo-advisors.

Do remember to check the records and certifications of the company or person you plan to hire before you make your decision.

3. Stage of investing and preferences

Here are three questions you can ask yourselves.

  • Are you: A Beginner or experienced investor?

Robo-advisors provide exciting money-saving options for smaller investors since they offer lower-minimums at a lower cost. This may be better for beginners who have less capital and have less confidence to start investing.

Human advisors customise your approach to investing which you may want if you have a larger pool of assets. Being experienced, you may have certain personal takes to different investments and may not want a robo-advisor to plainly decide on your risk tolerance. Human advisors are more flexible and can help you prioritise your investments, tracking your goals better.

  • Do you want to know more or you don’t really care?

If you don’t really care, a robo-advisor is perfect for you. Robo-advisors is generally for passive investing, which essentially means you can dump your money in and really not care for awhile while the algorithms do the work of rebalancing your portfolio.

However, if you want to gain more knowledge about investing, an in-person advisor is better for you to ask questions and understand your investments. Human financial advisors may be able to better communicate the value of investing to you by providing explanations and context about what is happening to your money. Basic information and close mentorship in this case may also be better for someone just starting out.

  • Have time or no time?

If you have less time on your hands, leaving your money with a robo-advisor is a hands-off activity that does not require much direct contact.

A human advisor, however, requires your direct contact with them in order to decide what you want. Being a more tailored service, they will also need interaction to determine what your preferences are.

4. Look At Reviews

Hindsight is a beautiful thing. We all know our first source of truth is always to ask our friends or the experienced people in the field to ask for advice and opinions. Perhaps for human advisors this would be hard to compare since there are over a hundred out there, but for robo-advisors it is a little simpler.

Here are some feedback:


  • Operations: MAS Capital Market Services Licence (CMS100604-1)
  • Methodology: Economic Regime-based Asset Allocation (ERAA)
  • Fees: Between 0.8% to 0.2% of total invested per year
  • Minimum: No minimum to start


  • Operations: MAS Financial Advisor Licence (FA100064-1)
  • Methodology: Diversification across major asset classes, geographical regions, and industries.
  • Fees: Flat 0.5% of total invested + USD18 platform fee per year
  • Minimum:  S$3,000 to start


  • Operations: With VCG Partners (external fund manager)
  • Methodology: Modern Portfolio Theory (MPT), a mix of equity and bond ETFs
  • Fees: Between 1% to 0.5% of total invested per year
  • Minimum: No Minimum to start

Overwhelmed? If you have any questions about all this, feel free to ask our community of financial gurus here, we’re always ready to help! Unbiased reviews and answers are how we roll.

The post Choosing A Financial Advisor: Robo-Advisors VS Human-Advisors appeared first on Seedly

About Junel Seet
Most of my expenditure is on sustenance. Yes, I meant food.
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