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Review: Syfe

by Apoorv Trivedi on

The Bottom Line

Syfe is an investment platform where you can buy ready made all-in-one portfolios containing equity, fixed income and gold with different risk profiles i.e. its a Robo Advisor. The portfolios are made of US listed passive ETFs that invest globally and are low cost. Syfe does active asset allocation using smart beta and asset class risk budgeting approaches and rebalances and reshuffles the portfolios twice a year based on their macro views.

Syfe guides customers towards taking advice from their advisory team rather than using a risk based Robo. The website and app are easy enough to use but not as polished as some other Robos and your assessed risk profile does not seem to play a major role in portfolio selection.

Syfe is licensed by MAS, is regularly audited and keeps your money in an omnibus account separate from Syfe’s funds. Syfe has a simple asset size based fee structure and were consistently among the cheapest providers in our sample.

Syfe was not our most preferred Robo Advisor in Singapore because they do active asset allocation, do not seem to use the risk assessment in portfolio selection for clients and have less sophisticated tools and website & app than peers.

Syfe
Among the lowest fee levels

Syfe builds low cost portfolios with US listed ETFs using smart beta and asset class risk budgeting approach. It was consistently among the cheaper Robos in our analysis.


What is Syfe?

Syfe is an investment platform with 4 products:

  1. A Robo Advisor
  2. A high yield alternative for Fixed Deposits called Syfe Cash+
  3. A selection of thematic portfolios
  4. A wealth advisory service for clients with complex needs, called Sype Private Wealth

How is it different from other Robo Advisors like StashAway etc.?

Low fees Syfe consistently had one of the lowest all-in cost of investing, across pricing tiers. This is including the ETF charges (0.20% approx.) and FX conversion (0.09% fee charged by Saxo).

Advisory Syfe focuses a lot more on the personal advisory side of things. The system prominently features the photos of the advisory team everywhere with the option to schedule a call with them. They offer 1 month of free interaction with the advisors for the lowest tier of clients. S$20k on the platform gets you all the personal advise you need and S$100k+ gets you a dedicated expert.

Robo? In contrast, the Robo of Robo Advisor is largely missing at Syfe. While Syfe does conduct a risk assessment for you, this happens before the sign up process. The system recommends a portfolio based on this assessment at that time, but it doesn’t seem to impact the actual investment workflow at all once you have signed up. You cannot see or edit the risk profile after you have signed up.

Active Asset Allocation Syfe builds its portfolio using low cost passive ETFs. Their starting equity mix is very different from a broad market index like MSCI ACWI and represents a significant active bet. They also rebalance and reoptimize the portfolios twice a year.


What are their fees like?

While Syfe is not the cheapest platform, it has a relatively simple pricing structure and consistently ranks in the cheaper half of the peer group. In the low to mid tiers (<S$500k) it was the 2nd cheapest advisor.

The platform fees starts from 0.65% for new accounts but drops to 0.5% for AUA above S$20k and 0.4% for S$100k. The Private Wealth tier which starts at S$500k has a platform fee of 0.35%. The Cash+ product has no platform fee.

The total expense ratio for ETFs averages to around 0.20% for the flagship portfolio with an additional 0.09% FX conversion fees paid to the broker, since all the ETFs are US listed.

Total Fee Paid in 15 years for an initial investment of S$50K.
Total Fee paid over 15 years
Rank by total fee paid over 15 years for an initial investment of S$50K
Rank by Total Fee paid over 15 years. Average Rank is the average of ranks for initial investments between S$30K - S$1M
How much lower would the portfolio valaue be after 15 years, compared to the lowest cost provider?
How much lower would the portfolio value be after 15 years, compared to the lowest cost provider?

 


What does the Robo do?

As with other Robo Advisors, Syfe does not reveal the algorithm behind its Robo but the experience is very different from its peers. First, there is a pervasive emphasis on personal advice from experts. Second, as I mentioned, the risk assessment happens before the sign up and apart from an occasional warning message when you select a portfolio above your risk appetite, it doesn’t really seem to play much of a role in portfolio selection or construction.

Syfe emphasizes advisors
Syfe emphasises personal advice from experts
Syfe emphasises personal advice from experts

What Syfe offers is a selection of 12 pre-built, low cost portfolios and you can choose those in whatever proportion you like. The 12 include 4 core, 5 thematic, 2 REIT+ and 1 Cash+ portfolio. Or you can create a custom portfolio.

In my experience the other Robos don’t do anything very complex or sophisticated either and it would be trivial to replicate the outcome of any other more polished Robo on Syfe or vice versa.

However, the more sophisticated platforms prominently highlight risk profile everywhere, especially while creating portfolios and setting up goals. The entire experience on those platforms has risk front and center. I think that emphasis creates a very different mindset in the user, always aware of the risk involved and of the trade-offs involved in taking more risk. And I think that is valuable.

Portfolio Construction Syfe Core portfolios are supposed act as all-in-one investment option for investors i.e. you put all your money in a single, simple portfolio and forget about it. Syfe claims the Core portfolios are designed using an asset class risk budgeting and smart beta approach to maximize the Sharpe Ratio of the portfolio. That means each portfolio is supposed to deliver the maximum return for that level of risk. See a detailed description from Syfe here.

Syfe Core portfolios contain Equity ETFs, Bond ETFs and Gold ETFs in varying proportions to adjust the risk level.

Syfe's asset allocation

Within a given asset allocation, which remains largely stable, Syfe varies exposure to factors like growth, volatility and countries, which means that the country and sector allocation can change materially over time and can be very different from the benchmark.

While this is supposed to be the secret sauce that maximizes the return for a given level of risk, this is a large deviation from the passive investing approach that Robo advisors are supposed to practice.

Syfe’s Equity100 portfolio differs materially from the MSCI ACWI index in its country and sector allocations. While it is not the worst offender in this category on our analysis, some of the deviations were pretty large. On our calculations, Syfe’s portfolios were in the middle of the active – passive range for its peers.

Syfe's Equity100 portfolio differs materially from MSCI ACWI in country allocation
Syfe's Equity100 portfolio differs materially from MSCI ACWI in sector allocation
How passive is the portfolio, by country, against MSCI ACWI?
Passive-ness score by Country (lower is more passive)
How passive is the portfolio, by sector, against MSCI ACWI?
Passive-ness score by Sector (lower is more passive)

Overall, Syfe Core offers a number of diversified portfolios at low cost that would be a huge improvement over most retail investors trading on their own or even investing in more expensive mutual funds. But those portfolios do have significant active bets and that makes them riskier than they need to be.


Is it safe?

Business Syfe has a Capital Market Services License for Fund Management from the MAS.

As a part of the process for approving this license, MAS ensures that the officers of the company are “Fit and Proper”, have competency in core business areas such as fund management, risk management, operation and compliance. Licensees should also have adequate capital and processes in place to manage risk and compliance related issues.

They need to be audited internally on a regular basis and independently at least once a year. They must also ensure that customer assets are valued independently and reported accurately via a 3rd party or an in-house department that operates independently of the investment management function. The annual audit is supposed to additionally verify the independent valuation.

Most importantly the license requires Syfe to keep customer assets segregated from their own assets and with an independent custodian so that they are protected and available to customers in the event of Syfe going bankrupt or facing other difficulties.

Syfe uses Saxo Capital Markets for keeping your assets and Saxo in turn keeps the deposits with HSBC and securities with Citibank.

Syfe has raised a substantial amount of equity from reputed venture investors like Valar in mid-2021. The CEO Dhruv Arora comes with experience as Product & Growth VP at Grofers, a delivery start-up in India and at the ETF desk at UBS.


How does it work?

UI/UX The experience of using the Syfe platform (on ap and web) is not as polished as the best in class peers. Most common tasks are intuitive to perform but the workflow is inconsistent in different places. Various screens / pages have content that is not always relevant to the core function and that is distracting.

For e.g. The home screen shows your portfolio value and performance but also has a continuously scrolling ads at the bottom for their referral program, the new Select product, the Syfe magazine. The Portfolios screen has an entirely different style with largely the same information as the home screen and cards advertising the Cash+ and REIT product and one to schedule a call with advisors. We were able to create multiple portfolios with the same default name, which could be confusing.

Multiple portfolios with the same name. Also personal advice.

Signing Up Syfe has a puzzling sign up process that asks you to choose one of the 4 core portfolios. This is before creating an account! It then takes you through a relatively long risk assessment questionnaire. If any of your answers conflict with your original portfolio choice, a warning / waiver page pops up, which you can click away. At the end, you get a screen showing the asset mix and past performance of you selected portfolio, with a mild warning if the selected portfolio has a higher risk profile that what the profiler recommends for you.

If your chose portfolio has a higher risk than your profile indicates
If your chose portfolio has a higher risk than your profile indicates

Once you confirm the portfolio selection, the signup process starts and is quite simple for Singapore Citizens and PRs via Singpass. We did not test the process for non SC/PR.

Funding The account can be funded by PayNow, Online Banking, GIRO, Wire Transfer and even remittance services like Wise and Instarem. PayNow transfers are very convenient used the QR code provided although you do need to manually type the reference code into the PayNow field, which should be avoidable.

In our testing Syfe confirmed receipt of funds on the same day and the investment was complete on the next working day.

Investing Investing on Syfe starts by adding a new portfolio and choosing among the options. If you choose a higher risk portfolio that your original risk profile indicated, you get a mild warning, which can be ignored. In all our testing, this was the only place where the original risk assessment seems to be used. We couldn’t find a way to modify that assessment once the account was set up.

If your create a portfolio has a higher risk than your profile indicates

You then see the asset mix and past performance of the portfolio. Continuing from here gives you the option to name the portfolio and indicate the amount of one time and / or monthly recurring investment.

Once the portfolio is set up, you can transfer funds into it or keep it inactive. There is a portfolio dashboard to see the sector or country mix, the constituting ETFs and historical performance.

Syfe Cash+  Syfe offers a single Fixed Deposit alternative with an indicative yield of 1.5%. This is towards the higher end of the range of 0.60% – 1.80% for products like this and this portfolio consists of the same 3 funds that are present in differing proportions in other products like this. You can move funds from the Cash+ portfolio to other portfolios or vice versa fairly easily. You can create multiple Cash+ portfolios.

Thematic Portfolios Syfe offers 5 pre-built thematic portfolios and also an option to create a custom portfolio using between 1-8 ETF out of a total of 100+ ETFs on the platform. The system defaults to an equal allocation to each ETF you select and you can customize the mix. You can also see the past performance, composition (asset class, sector, country etc.) of your chose portfolio and the system also assigns a risk rating to it.


Other Stuff

Syfe Private Wealth Syfe Private Wealth comes with access to non-Retail products and a dedicated advisor who will work with you for more in-depth and customized financial planning. This service required a minimum of S$500K invested on the platform. We did not test this service.

Customer Service We interacted with the Syfe customer service on many occasions, usually via e-mail. We found them to be prompt and helpful, usually resolving our query.


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