
Robo-Advisor Performance Review: 2H2022
Robo-Advisors in Singapore had a mixed 2H2022. Their Flagship portfolios underperformed while some Thematic portfolios did well.
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FSMOne is an investment platform where you can buy stocks, bonds, mutual funds and managed funds. We review the managed funds here, called MAPS, which come in 5 different risk levels. The portfolios are actively managed by FSMOne’s investment team and are made of different mutual funds that charge fairly high fund management fees. This makes MAPS much more expensive on an all-in basis than other Robos – on our calculation anywhere from 2-4x as expensive over a 15 year investment horizon.
FSMOne is primarily focused on investment advisers to serve their clients and the website is not at modern or polished as peers. The large number of products also make it somewhat more complex to navigate. Your assessed risk profile does not impact your ability to invest or the portfolios available to you in any way.
FSMOne is licensed by MAS, is regularly audited and keeps your money in an omnibus account separate from FSMOne’s funds.
FSMOne was not our preferred platform for managed portfolios in Singapore due to its high cost, active management of portfolios and relatively complex interface.
MAPS by FSMOne are actively managed portfolios with with higher fees. We do not think they are an appropriate substitute for Robo Advisors.
FSMOne (the platform formerly known as FundSupermart) is the grand-daddy of all investment platforms in Singapore. It offers:
We are only reviewing the Mutual Fund platform, MAPS and Cash Solutions here as a part of our review of Robo Advisers. The remaining services will be covered during our review of Brokers and Private Wealth Advisers. It is important to note that the MAPS portfolios are actively managed by people and don’t really fit the definition of a Robo-Adviser. We are reviewing them here because FSMOne is very big in Singapore and MAPS is the closest competitor to Robos on the platform.
Managed Portfolio Unlike most other options that we reviewed in this category, FSMOne does not have a Robo-Adviser, but only managed portfolios. These are supposed to do a similar job as a Robo but there is no real algorithmic advice provided by the platform, so it cannot be called a Robo.
FSMOne is first and foremost a platform for financial advisers to serve their customer. The MAPS product is a minor add-on offering and it shows in the product design and overall experience.
Active & Mutual Fund heavy The MAPS portfolio are not passive in any sense. They largely contain active mutual funds with fairly high fee levels, which makes them uncompetitive relative to other Robos which rely on low cost ETFs or even Endowus, which rebates the trailer fees back to you and relies on low cost, passive funds.
The asset allocation between Equity and Debt is fixed based on the portfolio you choose but the mix of assets in the Equity portfolio can change at the discretion of the FSMOne investment team. The equity country allocation in the portfolios was very far from a global benchmark like MSCI ACWI, at the time of writing.
All-in-One FSMOne offers more investment products than any other platform we tested. This includes stocks, bonds, mutual funds, managed portfolios and FD alternatives. FSMOne also allows you to invest CPF funds although not in the MAPS product.
Cash Solutions FSMOne has one FD alternative called Auto-Sweep that offers a yield of <0.6% at the time of writing, making it one of the lowest yielding products of this type. FSMOne also has multi-currency account but this is not an investment product as the interest offered is minimal.
Risk Assessment Unlike the more polished Robos, the risk profile of the customer doesn’t really play a role during the investment process. You can choose to transact any product no matter what your risk profile, without any warnings or guidance.
Active approach The MAPS portfolio are not passive in any sense. The asset allocation between Equity and Debt is fixed based on the portfolio you choose but the mix of assets in the Equity portfolio can change at the discretion of the FSMOne investment team. The portfolio is largely made up of active mutual funds. The equity country allocation in the portfolios was very far from a global benchmark like MSCI ACWI, at the time of writing.
Portfolios FSMOne’s managed portfolios are not passive or algorithmically constructed. The asset, country and sector allocation is actively managed by the investment team at FSMOne through their selection and sizing of mutual funds. The mutual funds are all actively managing the security selection. MAPS are effectively a fund of mutual funds.
We analyzed one portfolio, the Moderately Aggressive (Growth) portfolio, and found that the deviation of country mix from a global broad market Index was quite large relative to Robo-Advisers. FSMOne does not reveal the sector mix of their portfolios so we were unable to compare that but looking at the constituent fund names as a guide for what they invest in, we think the sectoral deviation would be large too.
Country | FSMOne | MSCI ACWI |
---|---|---|
USA | 24.26% | 59.79% |
Europe | 20.28% | 12.42% |
Japan | 3.12% | 5.86% |
China | 6.52% | 4.11% |
Australia | 19.01% | 1.78% |
Other | 45.82% | 16.04% |
Difference in country weighting between FSMOne Moderately Aggressive (Growth) Portfolio and MSCI ACWI
Since these portfolios are neither low cost nor passive, we don’t think they are an appropriate alternative for the Robo-Advisers.
The all-in fee (platform + fund management fee) for the MAPS product is very high, largely due to the fund management fee. We calculated an average fee of 1.75% for the funds included in the Moderately Aggressive (Growth) portfolio at the time of writing. Add 0.5% flat platform fee and a 0.03% counterparty transactional fee for a total of 2.28%! This compares with <1% total fee for most dedicated Robos. On our calculation, over a 15 year period, you would pay 2-4x more for MAPS than you would on other platforms.
Fee Line | Amount (% of Avg. Assets in MAPS) |
---|---|
Platform Fee (per year) |
0.50% |
Counterparty Transaction fee (per year) |
0.03% |
Avg. Mutual Fund Total Expense Ratio (estimated, per year) |
1.75% |
Very high fees for Mutual Funds making up the MAPS Portfolios
There is a fee of 0.05% for the Auto-Sweep product but nothing for the cash account.
There are no platform charges for CPF investments in mutual funds while cash investments in mutual funds have a fee of 0.35%. However its worth noting that unlike Endowus (the only other Robo with the option of investing CPF in funds), FSMOne does not rebate the commission paid by the mutual fund back to you.
In our comparison, Endowus rebated between 0.35-0.75% of commission back but charged a platform fee of 0.40% for CPF funds. So FSMOne is probably the more expensive option for CPF funds too.
Business FSMOne is a branch of iFast Financial, which has a Capital Market Services License for Fund Management, Dealing in Capital Market Products and Providing Custodial Services 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 FSMOne 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 FSMOne going bankrupt or facing other difficulties.
FSMOne also has a custodial services license so it custodies certain assets itself e.g. stocks, bonds, unit trusts etc. The cash is kept with Standard Chartered Bank.
iFast Financial has been in operation since 2000 and is also listed on the SGX. The company also operates similar businesses in multiple countries including China, India, Malaysia and Hong Kong and is supervised by those regulators as well.
UI/UX FSMOne website has a slightly dated look and the wide variety of investment options make it a little more challenging to navigate. Confusingly, there are two separate menu bars at the top with a lot of overlap in function. That said, most common functions are not too hard to find and complete.
Signing up FSMOne supports onboarding of Singapore Citizens and PRs through Singpass. This means your account is ready and fully functional within a few minutes with no paperwork required. The process for non SC/PR is does require more effort and we did not test it.
Funding The account can be funded via FAST, PayNow, Bill Payment via internet banking, Cheque, Telegraphic Transfer and bank drafts. FSMOne does not provide a QR code for PayNow transfer at the time of writing, which seems curious. In our testing, the PayNow transfer was acknowledged within minutes and the funds were ready to used for transactions the same day. This is faster than other Robos.
Investing Investing in MAPS is straightforward. Click Place Orders, select a Managed Portfolio from the dropdown, indicate if it’s a one time (Buy) or recurring (Regular Savings Plan, RSP) purchase, select a payment method and amount for one time and recurring investment, add the product to cart and checkout.
There are a total of 10 MAPS portfolios to choose from. There are five levels of risk corresponding to equity allocations of 10%, 30%, 50%, 70% and 90% and at each level there is the option to choose either an income focused or growth portfolio. The income focused portfolios distribute all income received on a quarterly basis while the growth portfolio reinvest.
The same workflow as MAPS, applies for buying a mutual fund too. A blank search using the Fund Selector tool on the website threw up a list of 1,726 funds, which is a lot! The tool allows shortlisting funds based on a number of criteria like fund manager, asset class, sector, geography, risk rating, currency etc. FSMOne also has a list of about 45 funds that it recommends.
The Auto-Sweep cash account, which is somewhat similar to the FD alternatives at other platforms, requires you to opt-in your accounts for the facility. This is just a 3 click process after which all free cash in the account is moved into the auto-sweep account to earn the higher yields.
Overall if you know what you want to achieve, it is not too hard to set it up on FSMOne. But unlike our preferred Robos, FSMOne does not guide you towards a set up that would be appropriate for most people.
Customer Service We interacted with FSMOne customer service via e-mail and chat and found them to be very responsive and helpful.
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Robo-Advisors in Singapore had a mixed 2H2022. Their Flagship portfolios underperformed while some Thematic portfolios did well.
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