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The Best Robo Advisor in Singapore

by Apoorv Trivedi on

The Best Robo Advisor in Singapore: Endowus

The best Robo Advisors can make investing easy and cheap. Endowus does exactly that and in our opinion it is the best Robo Advisor in Singapore for most people.

On Endowus, you can easily invest all your money, including eligible CPF funds, in low-cost, globally diversified passive portfolios that are appropriate for your risk appetite. They make it easy to set up goals and invest a single sum or set up recurring investments. They also have the highest yielding (and most) options for fixed deposit alternative.

Endowus has a Fund Management license from MAS and keeps your money with UOB Kay Hian in an account under your name. While it is slightly more expensive than other Robo Advisors, it rebates all mutual fund commissions back to you and is much cheaper than traditional channels like Banks and Investment Advisors.

Our Pick
Endowus
The Best Robo-Advisor in Singapore

On Endowus, you can easily invest all your money, including eligible CPF funds, in low-cost, globally diversified passive portfolios that are appropriate for your risk appetite.

If you found this useful, consider signing up for Endowus via the link above. This gives you access to the best deals and helps us maintain the site.


Also Great – StashAway

If you don’t need to invest your CPF funds and are comfortable with the additional risk that comes from active asset allocation, StashAway offers the best tools for goal based investing and is the lowest cost Robo-Advisor for people investing more than S$500K.

Also Great
StashAway
Great tools for Goal-based investing

StashAway offers the best tools for goal based investing and is the lowest cost Robo Advisor for portfolios larger than S$500K.

If you found this useful, consider signing up for StashAway via the link above. This gives you access to the best deals and helps us maintain the site.


The Research


Why you should trust us

We spent more than 100 hours researching Robo Advisors in Singapore. We spent many hours on each app and website understanding the approach to risk assessment and investment of each Robo Advisor. We compared their fee structures and ran simulations to see how the fees would vary over different amounts invested on the platform. We went through their FAQs, read and viewed the educational & promotional material on their websites and asked questions to their customer support staff.

We opened live accounts on most of the Robo Advisors in Singapore and spent hours evaluating the functionality of each. We invested our money in the portfolios on a number of platforms to test the ease and speed of transactions. We looked into the mutual funds and ETFs that made up our portfolios on the platforms to understand what went into them and how much management fee we would be paying.

We also looked up the licenses they had on the MAS website and went through the conditions of licensing to understand the processes they would have in place to safeguard your funds.


Who this is for

If you are not financially savvy or do not want to spend hours or days every year researching and managing investments, if you would like a simple solution that provides better returns than most active investors at a simple to understand and low fee, then Robo advisors are for you. We think they are a huge improvement over buying mutual funds from Banks or Financial Advisors.

If you are comfortable with terms like rebalancing, tax loss harvesting & dividend withholding tax and enjoy researching ideas & trading stocks in your spare time, even then you may find it useful to invest your CPF funds cheaply and easily in a globally diversified portfolio, as our pick, Endowus, can do.

Some robo advisors also offer higher yield (and slightly higher risk) alternatives to fixed deposits, that can be a good option to park your excess funds while you are waiting for better opportunities.


How we tested and picked

To find the best Robo Advisor in Singapore we evaluated them on 6 criteria: Investment Style, Investment Options, Fees, Guidance & Tools, Ease of Use and Safety & Viability.

Investment Style We had a strong preference for Robos that followed a more passive investing style. This means that they simply try to recreate a portfolio that will perform in line with the broader global market and do not prefer certain countries, sectors or stocks in a bid to deliver better than market returns. Research overwhelmingly shows that most active investors underperform the market after fees and expenses and it is also not possible for us to pick a winning manager with any degree of certainty.

For our comparison, we first looked at the disclosed investment strategy of each platform to assess how passive it was. Most newer platforms used broad market or sector ETFs meaning they did not practice stock selection. Some, like FSMOne, did use actively managed mutual funds to construct their portfolios.

Most platforms in Singapore engage in active asset, country and / or sector allocation, though. This means that the recommended portfolios look very different from truly passive portfolios, which can result is your returns being different from the broader market returns.

For the technically inclined, we  summed up the squared differences for each country and sector weight in the recommended portfolio vs. their weight in the MSCI All Country World Index (ACWI). Those with larger deviations were assumed to be more actively managed. We did not have this data for all the platforms but the platforms that did not disclose this data often had visibly large gaps vs. the ACWI based on whatever information was available.

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)

Investment Options A good investment platform should also be able to meet all or most of your investing needs, so that you can avoid the complexity of managing your money across multiple platforms. In Singapore that means being able to invest your cash, SRS and CPF in portfolios of different risk levels and durations.

We also looked at whether platforms offered a higher yielding (and also higher risk) substitute for fixed deposits. We saw a number of platforms offering access to thematic portfolios, ETFs and even high cost mutual funds.

Products offered by Robo-Advisors
Products offered

It is likely that these platforms will offer more and more investment options over time as they try to get all of your assets invested in their products. However, right now, their product sets are far from complete and we did not give much weight to these additional products.

The use of Singpass and myInfo has now become quite common for sign up and KYC purposes. All but two of the platforms we tested were set up using Singpass and we did not need to sign any papers or fill any forms to get our accounts ready.

This means its much easier to mix and match platforms for different needs but in our view it is still better to concentrate your money across fewer platforms to take advantage of the better pricing and service that comes with having larger AUA on most platforms.

Fees Traditional investing platforms like banks, mutual fund, investment advisors have historically charged fairly high fees, which has a large impact on the returns you see on your investment. It is also common for investment platforms to have multiple levels of fees that make it difficult to figure out exactly how much you will end up paying over the life of the investment.

In comparing the advisors in Singapore we saw platform fees, fund management fee, trading fee, FX conversion fee and even the infamous performance fee. We preferred platforms with simple, transparent and low fee structures.

While the newer platforms show a vast improvement over the traditional platforms when it comes to fees, it is still difficult to really figure out and compare the total cost of investing across different platforms.

We included platform fees, performance fee, underlying ETF or Mutual Funds’ Total Expense Ratio and FX conversion fee on entry and exit where applicable, in our calculations shown in the tables below. We calculated the total fee paid over a 15 year period for different levels of starting AUM and assumed an annual investment return of 7.5% on these funds.

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?

We did not include the impact of dividend withholding taxes or estate taxes in our calculations.

Guidance & Tools The concept of risk assessment is not new but traditional platforms have usually conducted it as a compliance measure that plays no role in actual investment decisions of the customer. The best Robo Advisors use risk measures as an active and important input in throughout the investment process.

This does not stop the customer from changing their risk assessment and possibly choosing inappropriate portfolios. However we think by actively highlighting the risk of loss in every decision, these platforms put the customer in the correct frame of mind and improve the quality of decision making. We have not seen any research on this but in our testing we felt this was a much better approach for most investors.

We looked at how good each platform was in helping you understand risk, how well did they integrate it into the decision making and the kind of tools they offered to help you create the right portfolios for your needs.

We felt Endowus and StashAway did a great job of incorporating risk in the investment process by focusing on a single metric for risk (maximum probable loss in 1 year). In our opinion this is much better than using a multiple choice questionnaire, either during account opening or while setting up a portfolio, which is what every other Robo-Advisor did.

Ease of Use Managing money can be complicated and this is a one reason that a lot of people end up neglecting it. A platform that can make investing easy to understand, simple to implement and sustain can make a big difference for a lot of people in putting their money to work for them and meeting their goals.

The best platforms today to a very good job of making the most common tasks effortless. Their interfaces are focused and all the main tasks are easy to execute, be it opening the account, making the first investment, setting up a recurring investment or moving money in and out.

We preferred platforms that were clearly focused on the basic Robo-advisory portfolios and where the other products did not distract us too much.

However its possible that over time these platforms will add more products as they try to get more of your money under management and end up becoming as complicated as the traditional platforms. We already see most platforms adding products that are not simple or cheap and this is something we will watch.

Safety & Viability The MAS has a deserved reputation as a top tier regulator globally. All the platforms we tested were licensed by the MAS. Most had the Capital Market Services license for Fund Management which comes with stringent requirements for regular audits, compliance, segregation of customer funds, risk management and capital.

A number of platforms had also raised significant amounts of capital from reputed VCs and other investors. This should allow them to keep operating for some time even if they lose money as a business in chasing growth.


Our Pick – Endowus

Endowus is our pick for the best Robo Advisor for most people in Singapore. It checked nearly all the boxes in our comparisons.

It is the only platform that allows you to invest all your money – CPF, SRS and Cash. No other dedicated Robo Advisor offers the ability to invest CPF and all other options to invest CPF (Banks, FSMOne) do not pass back their sales commissions to you, making them a lot more expensive on an all-in basis.

Endowus is unusual in constructing their portfolios using mutual funds rather than ETFs, as most other Robos do. This leads to higher all-in fees but offers some tax benefits and also enables them to invest CPF money, which has restrictions on where it can be invested.

Despite the use of mutual funds, their portfolios were the most passive on our calculations. The country and sector mix of the equity portfolio was nearly identical to a broad market portfolio like MSCI ACWI and unlike some peers they do not change the mix of equity and fixed income in the portfolios over time. Their risk metric of maximum likely loss in a given year is conservative and easy to understand.

The website and app are clearly focused on helping you invest the in appropriate core low cost portfolios and the risk assessment is front and center as you follow the process. The user interface is clean and fast and disclosures are transparent and easy to understand. We found the customer service to be very responsive and helpful as well.

On our calculations, their all-in fees were higher than the lowest cost peers across different fee tiers. However, our calculations do not account for the benefit that comes from not having to pay the dividend withholding tax, which could reduce the gap somewhat. It is also important to understand that while their fees are higher than other Robos, they are much lower than investing in funds or managed portfolios offered by Banks or Financial Advisors – often by half or more.


Also Great – StashAway

If you do not need to invest your CPF money and are comfortable with a more active asset allocation approach, StashAway is a great option for your investments.

StashAway constructs their portfolio using US listed ETFs and had the lowest all-in fees of any platform for a total investment of more than S$500K. They were fairly competitive even for smaller investments.

In our opinion, StashAway offers the best tools for goal based investing in Singapore. For each goal (buying a house, college education, retirement etc.) the tool guides you towards an appropriate target amount, risk level of the portfolio and the duration for which you need to save.

Their website and app are also easy to use and focused on helping users invest in portfolios appropriate for their goals and risk appetite. We found the customer service to be fast and helpful.

StashAway missed out on being our pick for two reasons. First, they do not offer an option to invest your CPF money. Second they rely on a proprietary methodology to actively shift asset / country / sector mix of their portfolios, although they use passive ETFs to form those portfolios. On our calculations, their portfolios were very different from a truly passive portfolio.

While StashAway has charts on their website showing that their approach has outperformed benchmarks since inception, that is a relatively small period to draw meaningful conclusions. StashAway claims that asset allocation can be responsible for up to 80-90% of total portfolio performance but do not present any evidence to show that active asset allocation consistently leads to outperformance over the long term.


The Competition

We compared 11 Robo Advisor / managed portfolio offerings in Singapore with detailed reviews of 7 platforms.

Syfe has a simple asset size based fee structure and was consistently among the cheapest providers in our sample. However we felt Syfe could do more to get investors to understand the risks they are taking. Syfe also had a very active approach to country and sector allocation. Finally, we felt their website was not as consistent or user friendly as Endowus or StashAway.

Kristal.AI had the lowest fees of all platforms for portfolios <S$500K on our estimates, but we found it difficult to understand the all-in cost as they also charge trading and FX fees separately. Their portfolios are very actively managed and we felt risk metrics were not as integrated in to the decision making process as the best Robos. We also did not like the varying and relatively high minimum investment sizes for different portfolios.

FSMOne is difficult to ignore given their long history and size in Singapore. Their MAPS product is the closest competitor for Robo Advisors but we found it to be very expensive, often 2-3x the total cost of other Robos. MAPS portfolios are also fully actively managed by a team of experts at FSMOne, which we do not prefer.

digiPortfolio by DBS is an actively managed portfolio service, like MAPS. However, it felt like the service was not fully ready yet, missing key features like ability to set up recurring investments, automatic FX conversions, ability to trade during rebalancing dates etc. We will do a full review once the service is more ready.

MoneyOwl’s Dimensional product is very similar to Endowus, our top pick, and is slightly cheaper as well. However, they do not have an option to invest CPF, their FD alternative has very low yield vs. peers and the site was relatively inefficient.

MoneyOwl consistently uses the risk assessment questionnaire to guide portfolio choice. However, we prefer the single metric approach of Endowus and StashAway as it allows for active engagement with portfolio construction. We are concerned that the MoneyOwl approach can lead to questionnaire coma (the state of clicking randomly to make the pop-up questions go away) rather than understanding risk. We felt these concerns were more significant than the small fee different vs. Endowus.

AutoWealth explicitly tracks the MSCI All Country World Index for the equity portion and FTSE World Government Bond Index, which we like. Their fee structure was a little odd with a US$18 annual fee on top of the 0.50% platform fee but they are reasonably competitive overall.

However during our testing their they did not use myInfo for sign up and the account took 5 days to be ready (same day for most other Robos), and the user interface wasn’t very intuitive or polished. We have not yet completed a full review of AutoWealth but the core product looks interesting because it is clearly passive and uses lower cost ETFs, making it cheaper than other passive options.

SquirrelSave We decided not to review SquirrelSave as it charges a 10% performance fee, which we felt was unacceptable for a Robo Advisor.


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