The Ultimate SG Robo-Advisor Comparison: DBS digiPortfolio VS EndowUs VS Stashaway VS AutoWealth And More
There has been a ton of news surrounding robo-advisors in Singapore recently,
And much has been talked about when DBS moves into the robo-advisor scene to compete with it’s digiPortfolio.
With increasing interest in the robo-advisor scene, we decided to do a detailed comparison of some of the major robo-advisor players in the market. We’ve also omitted FSM Maps and PhillipCapital SMART Portfolio as they both behave more like a risk-based unit trust portfolio recommendation than as a true robo advisor.
Important Disclaimer: This article is updated as of 05 November 2019. The article does not constitute financial advice but is an unbiased comparison between the robo-advisors in the Singapore market today. This is also non-sponsored, so we’re writing this from a truly unbiased perspective.
What Is A Robo-Advisor?
When it comes to wealth management, the only way you can do it in the past is through a mutual fund, where managers basically curate a list of funds with the ultimate goal of doing better than what the market returns. Naturally, they would charge a hefty 2-3% management fee to try to ‘beat the market’.
These exorbitant fees usually eat into returns in the long run and the ones who benefited ultimately were the fund managers.
With the advancements made in technology as well as developments in machine learning, the advent of robo-advisors – digital platforms that made automated and algorithm-driven investment decisions – aims to change all of this by providing an option for low cost, diversified, passive investing.
The Promise: Low-Cost, Diversified, Passive Investing
- Low Cost: Usually 0.5% to 1% fees are charged for the total amount managed. The costs are low because they are run by models and algorithms instead of an actual, human fund manager – hence the name ‘Robo’.
- Diversified: Usually put into a basket of Global Exchange Traded Funds (ETFs) which exposes the fund to the global economy in different sectors, and usually diversified through a mix of equities and bonds in the portfolio. Note: some of these ETFs are not available to retail investors.
- Passive Investing: Suitable for a longer-term approach (longer than 10 years) to growing wealth rather than high-frequency trading and taking short-term positions.
So Who Would Benefit From Robo Advisors?
Robo advisors are perfect for time-starved working adults who are looking to grow their money passively (think: the bulk of Singaporeans today, who are between 21 to 45 years old).
Instead of physically going down to a bank to look for a relationship or fund manager – who may or may not even have your interests at heart – why not opt for a more transparent method which only seeks to grow your wealth?
Robo-Advisor Wars: A Comparison Of The Major Robo-Advisors In Singapore
We’ve talked a lot about how robo-advisors are a low-cost investment solution, but there’s more to choosing a robo-advisor than just the lowest fees.
Here’s what else you should be looking out for when choosing a robo-advisor:
|Team||DBS portfolio management team, with the Chief Investment Officer in charge of the macro-overview strategy of the portfolio.||Ex Zalora CEO and Nomura MD||Ex Investment Bankers & Consultants||Ex Tech Startup & Analysts||Former CEO and CIO of Morgan Stanley Investment Asia||Syfe leadership team consist on CEO of leaders who were from places such as UOB Venture Management||Founded by Asheesh Chanda and Vineeth Narasimhan in 2016, 15 years in the financial industry, ex JP Morgan Chase.||Led by Victor Lye, Corporate entrepreneur with over 25 years’ cross industry experience in investments, insurance and healthcare.|
|Operations||-||MAS Capital Markets Licence CMS100604-1||MAS Financial Advisor Licence FA100064-1||Collaboration with VCG Partners Pte. Ltd||MAS Financial Advisor Licence FA100066-1||Monetary Authority of Singapore|
License - CMS100837
|-||Capital Markets Services licence (CMS100806)|
|Method||2 investment portfolios: Global and Asia portfolio.|
Invest according to different risk profiles.
|Economic Regime Based Asset Allocation||Rule Based Investment algo with the Modern Theory Portfolio Theory||Modern Theory Portfolio (mix of bonds and equity)||Global portfolio via DFA & PIMCO||Global Portfolio 3x diversified across assets, countries, and sectors||Curated ETFs|
Goal-based financial planning
Customized portfolios by AI-based advisory
|Fully AI platform that invest based on personalized risk profiling of individuals.|
|Fees & Pricing||0.75% Portfolio Management Fees p.a||From 0.2% to 0.8% p.a||Flat 0.5% p.a + USD18 per year||From 0.5% to 1% p.a||From 0.25% to 0.60% p.a||From 0.4% per annum||Free for investments upto USD 50,000 |
0.3% p.a. for AUM over USD 50,000
|0.5% per annum + 10% of any positive return.|
|User Interface||Both Web and Mobile App||Both Web and Mobile App||Only Web app||Only Web app||Both Web and Mobile App||Web||Web and Mobile App||Web only.|
|Minimum Investment||$1,000 to $10,000||None, Varies.||$3,000||None||$10,000||None||$100||None|
A Brief Introduction To The Robo-Advisors In Singapore
- History: Created by DBS Bank, the DBS portfolio management team, with the Chief Investment Officer is in charge of the macro-overview strategy of the portfolio.
- Methodology: 2 investment portfolios: Global and Asia portfolio. Invest according to different risk profiles.
- User Interface: Available for both web and mobile app. To be launched in 2020
- Pricing: 0.75 portfolio management fee p.a
- History: Started in 2016 by ex ZALORA Group CEO, Michele Ferrario, ex Nomura MD, Freddy Lim and CTO Nino Ulsamer
- Funding: $20.4 million USD in 4 funding rounds, with the latest round being led by Eight Roads Ventures, the proprietary investment arm of Fidelity International.
- Operation: Under MAS Capital Market Services Licence (CMS100604-1)
- Methodology: A proprietary investment strategy called the Economic Regime-based Asset Allocation (ERAA) which continually monitors economic and market cycles to rebalance accordingly
- User Interface: Adopting a modern interface similar to Betterment (USA) with simple goals, charts, and visuals
- Pricing: Between 0.8% ($25k) to 0.2% ($1M) of total invested per year (No Minimum to start)
- History: Started in 2015 by ex Investment Banker at government firm, Ow Tai Zhi and ex Management Consultant, Noel Lee
- Funding: Undisclosed but with high net worth angels and currently incubated in NUS Enterprise
- Operation: Under MAS Financial Advisor Licence (FA100064-1)
- Methodology: A rule-based investment approach and strategy which places a strong emphasis on diversification across major asset classes, geographical regions, and industries.
- User Interface: A heavier interface with bright visuals and more words to digest and numbers to understand
- Pricing: Flat 0.5% of total invested + USD18 platform fee per year (Minimum to start: S$3,000)
- History: Started in 2015 by ex start-up professional, Keir Veskiväli and Investment Analyst, Artur Luhaäär
- Funding: Undisclosed but with high net worth angels and Expara Ventures
- Operation: Under a collaboration with VCG Partners Pte. Ltd. a MAS licensed fund manager in Singapore. Legally you’re contracting with the licensed fund manager, while Smartly is the technology provider. (i.e they don’t hold or invest your money directly)
- Methodology: Modern Portfolio Theory (MPT) consisting of ETFs that efficiently capture the global stock markets as well as give exposure to bonds and real estate. Rebalances when market conditions change.
- User Interface: Underwent an intensive design iteration from version 1.0 until now. Engaged external agency work to help redefine company branding with visuals and interface.
- Pricing: Between 1% ($10k) to 0.5% ($100k) of total invested per year (No Minimum to start)
- History: Started in 2017, led by Samuel Rhee, former CEO and CIO of Morgan Stanley Investment Management Asia.
- Funding: Undisclosed but seems to be independently owned and operated
- Operation: Monetary Authority of Singapore under the Financial Advisers Act (Chapter 110) of Singapore (“FAA”) (FA License No. 100066-1)
- Methodology: Building of Global portfolio via Dimensional Fund Advisors (DFA) & PIMCO funds
- User Interface: Open to retail investors and accredited investors (ie higher net worth).
- Pricing: From 0.25%~0.60% p.a of total invested per year (Minimum $10k deposit to start)
- History: Syfe is a digital wealth manager licensed by the Monetary Authority of Singapore for retail fund management.
- Funding: Backed by Unbound, MPGI, David Rogers and Paul Redbourn
- Operation: Monetary Authority of Singapore License – CMS100837
- Methodology: Successful long-term investing is much more about managing risk than chasing returns. Learn how Syfe takes a dynamic, risk-based approach to your portfolio’s asset allocation to deliver better returns.
- User Interface: Website
- Pricing: From 0.4% per annum
- History: Founded by Asheesh Chanda and Vineeth Narasimhan in 2016; what started as an ambitious idea sketched out on a black-board, is now present and thriving in three countries.
- Funding: $1.85M seed round of funding led by IDG Ventures India.
- Methodology: Curated ETFs, goal-based financial planning and customized portfolios by AI-based advisory
- User Interface: Web and Mobile Application.
- Pricing: Free for investments up to USD 50,000, 0.3% p.a. for AUM over USD 50,000
- History: Led by Victor Lye, a Corporate entrepreneur with over 25 years’ cross-industry experience in investments, insurance and healthcare.
- Operation: Capital Markets Services license (CMS100806)
- Methodology: Fully AI platform that invests based on personalized risk profiling of individuals.
- User Interface: Web
- Pricing: 0.5% per annum + 10% of any positive return.
- Methodology: 28 baskets of portfolios comprising stocks and ETFs, specially curated for you by OCBC’s leading wealth experts.
- User Interface: Web
- Pricing: 0.88% p.a of total value of your investments held.
So Which Robo-Advisor Is The Best?
Comparing Costs Based On Investment Amount
There are costs beyond the investment amount that you have to fork out if you were to invest in a robo-advisor, one of it is the management fees.
In most cases, pricing and fees for robo-advisors are relatively affordable, with management fees ranging from 0.2% to 1% per annum. So if cost is a consideration for you, do take note of the various management fees incurred for the different robo-advisor.
Pros and Cons Of The Different Robo-Advisors
There are some pros and cons when choosing the right robo-advisor. Based on user reviews on Seedly, here are some pros and cons of the different robo-advisors in Singapore
|DBS digiPortfolio||Beginner Investors with a DBS account||Easy to use, |
Low investment entry amount of $1,000.
Able to choose curated investments based on the level of risk appetite.
|DBS digiPortfolio's fees are slightly more expensive than other robo platforms.|
|Stashaway||People with small starting capital and/or smaller investment amounts, or those with large investments. ||Easy to use app with a seamless interface. One of the lowest fees for small investment amounts at 0.8%% a year.|
App allows users to track investments seamlessly
|Certain months with stagnated returns.|
|Autowealth||Serious Investors who want to stay long term.|| Transparent and Detailed platform. |
Auto-rebalancing to ensure not one asset class is overloaded.
AutoWealth assigns each user a personal advisor. You can get support via text, or meet the advisor face to face.
|Minimum $3,000 investment amount.
|Smartly||Those with investments from $10,000||Fees drop from 1% to 0.7% for investment amounts more than $10,000|
Simple to use UI,
High risk index portfolios seems to bring average returns.
|endowus||Investors that prefer to invest in unit trusts rather than ETFs||Lowest fees among robo platforms that invest in unit trusts,||Minimum account balance of $10,000
Over complicated UI.
|Syfe||More risk-averse individuals||Low management fees of 0.65% p.a. Interesting risk based approach. |
Portfolios created by Syfe based on the downside risks you are willing to take, rather than returns.
|Not the best user interface. No Mobile App.|
|Kristal.AI||Investors looking for very low fees||Low fees, no penalties for opening or closing an account. |
24/7 customer support, initial investment of just $10
|No automatic portfolio rebalancing (which Autowealth / Stashaway has)
- Risk profiling not as comprehensive as Autowealth / Stashaway
- Algo advisory dosen't explain the rationale for each selected combination of ETFs / Kristals.
|SquirrelSave||Investors who want a personalised portfolio||Relatively low management fee. |
Beginner Friendly UI, uses machine learning.
|Charges a performance fee.|
|OCBC RoboInvest||First time investors looking to invest with a bank||Easy to use platform, liberty to choose when to sell.|
Straightforward and diversified.
|No dedicated mobile app, long waiting time.
No funds dedicated in high growth emerging markets.
Here’s What Real Users Have To Say On The Different Robo-Advisors
Would you prefer to hear from actual people and users who have used robo advisors before, before making your decision?
You can use this one-stop portal to compare ALL the robo-advisors on the market and see which is the one for you!
Doing Your Own Diligence
As with any other investments out there, there are bound to be risks aplenty.
Even if robo-advisors are arguably an easy way to get started passively. It is ultimately up to you as a retail investor to do your own due diligence when selecting which robo-advisor to go with as well as what kind of funds to invest in before executing.
If the ever-surging popularity of US-based robo-advisors like Wealthfront (led by an experienced management team) and Betterment (heavily funded and growing assets under management) is any indicator, the era of low-cost investment options is here to stay and that’s great news for us as retail investors!
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