A Comparison of Singapore’s Roboadvisors: AutoWealth, Smartly and StashAway

What are roboadvisors?

Simply put, Roboadvisors are automated financial advisers that are cheaper and arguably less likely to underperform and overpromising to beat the market. As a medium to long term passive investment, having lower management fees helps to realize significant cost savings. Let us assume a $10, 000 portfolio, and the unlikely event that your investment experiences zero changes over the course of 5 years. If you opt for Roboadvisors that charge a 0.8% management fee instead of the typical 3-5% management fees charged by fund managers, you save $220-$420 a year, and $1, 100-$2, 100 over 5 years!

Like financial advisors, Roboadvisors can help you customize your portfolio by picking a relevant set of offerings according to your funds available, risk appetite, time horizon, and other preferences. Different Roboadvisors use different algorithms to create a diversified portfolio. They also tend to rebalance your portfolio regularly whenever there is a significant, predicted market change. As such, it is imperative that you read up on their methods before deciding which to settle for.

Source: Zuuonline.sg

Comparison Points

New sign up or referral programme

Before parking your money in an investment, always research extensively on how you can save more money. Remember that at the end of the day, these Roboadvisors are also businesses that seek to acquire more clients to expand their customer base.

As a new, budding way of investment, new sign up perks and referral programmes are likely to be offered. Do check their website and social media networks for updates consistently! You can even drop them an e-mail enquiring about upcoming promotions. In essence, you want to avoid the situation where you no longer qualify for a new user promotion.

Source: Auto Wealth

AutoWealth will be waiving one year’s management fees to celebrate 2 years of operation. The promotion has been extended to the end of the year, 31st December 2017. On their website, you can arrange a face-to-face meeting with one of their staff at various locations across Singapore at any day. That is right, there are weekend time slots as well! You will need to fill up a questionnaire here beforehand. After which, you will be able to see your projected risks, returns as well as a recommended portfolio. Do note that you must meet up with an AutoWealth representative to create an account as there are documents to sign. This added human touch is also helpful for new investors who may have queries to clarify. As of the time of this writing, it takes about two weeks to set up an account due to some platform changes made by Saxo Capital markets. This is likely to be resolved soon though.

Source: Stashaway

StashAway has a referral promotion that waives 6 months of management fees for both the referrer and the referee. The promotion is cumulative. For instance, if you refer two friends and both invest at least $1, then $20,000 of your assets under management would be managed for free for six months. If you referred three friends, then $30, 000 will be managed for free for six months. The entire onboarding process is done online.

Smartly does not have any promotion as of now.

Investment Method

Autowealth’s investment portfolios are defensive against market turmoil and recessions as it is diversifies cost-efficiently through index-tracking Exchange-Traded Funds (ETFs) listed on the New York Stock Exchange and NASDAQ. There is a mix of Equity (Stocks) and Fixed Income (Bonds), diversified across major geographical regions in the world including U.S., Europe and Asia Pacific and diversified across major industries including oil & gas, materials, industrials, consumer goods, health care, consumer services, telecommunications, utilities, financials & technology. Do note that AutoWealth will not be giving the dividends/bond coupons in cash through distributions back into the client’s designated bank accounts. Instead the dividends will be reinvested. They will be revising the FAQ section to reflect the changes.

Source: Smartly

Smartly uses the Black Litterman model to apply various criteria for their investment portfolio algorithm. For instance, limitations of how much can be allocated to a particular ETF, or to a particular asset class/region are used. To manage risks, they apply a mean-variance optimization model to construct the portfolio.

StashAway uses a proprietary investment strategy called the Economic Regime-based Asset Allocation (ERAA) which rebalances your portfolio according to economic conditions. It may be rebalanced daily, monthly, or quarterly, depending on the market.

Events

AutoWealth has had workshops where interested parties can attend to find out more about Roboadvisors. The previous workshops were conducted by their CEO, Ow Tai Zhi.

Smartly has not had a private event.

StashAway has had pop up shops which featured their CIO, Freddy Lim and CEO, Michele Ferrario. They also have regular free events on investing basics, their own investment framework, as well as live Q&As.

Money Matters

Start Up Cost

There is no minimum start up for Smartly and StashAway. However, AutoWealth requires an initial capital of $3, 000.

Management Fees
AutoWealth charges 0.5% on top of a fixed USD18 platform fee per year.

Smartly charges a range from 0.5% to 1% per year, depending on your invested amount.

StashAway charges from 0.2% to 0.8% per year, depending on your invested amount.

It is important to note that this is purely a management fee comparison. From a qualitative standpoint, it is important to look at the platform holistically before deciding which to use. While the management fees are an important factor, it should not be your deciding factor.

Comparing management prices alone, it is obvious that StashAway is suitable for investors with a lower capital.

Other Things To Note

This article should have sparked up your interest on other means of investments to further diversify your existing portfolio. Roboadvisors are likely to transform the industry of wealth management, and it is definitely a tool that investors can look into and experiment with.

Beyond reading up on investment blogs and FAQs on the company’s website, you can also follow them on social media to stay updated. Do not be shy to ask your friends to share their first-hand experience!

This article first appeared on ZUU online.

ZUU online is an Asia-based financial education online portal. Founded in Japan by Kazumasa Tomita, a former private banker at Nomura Securities, the portal seeks to fill the information gap between institutional research houses and the private investor.

The information provided above is accurate as of the time of writing and should only be used as a reference. For the most updated terms and conditions and the latest promotions, please refer to the respective companies’ websites.

(By Vanessa Ng)

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