Everyone and their mom has been telling you that you REALLY ought to start investing this year. But you’re not the most financially-savvy person, nor are you not rolling in dough. How exactly, then, do you get started?

One of the easiest ways to start investing is through a robo advisor. These are designed to be stress-free, approachable and cost-effective for the n00b investor.

Here’s a guide to how robo advisors work, whether this method is right for you, and (perhaps most importantly) how to choose the right one.

What are robo advisors? Why choose them?

Robo advisors are digital investment apps. They do have some variations, but generally, you sign up on an online platform, input your goals and risk appetite, and — using some fancy algorithms — the robo advisor will recommend an investment portfolio for you.

If you’re happy with the suggestions, you can invest directly through them. You can also monitor your portfolio online with robo advisors, and rebalance your portfolio whenever you need to.

As the word “robo” suggests, there is no direct human involvement in the advice rendered. Yet, every robo advisor is subtly different, because they use different algorithms based on the company’s knowledge of markets and investing.

Of course, since robo advisors aren’t human, they can’t (yet) capture all your nuances and customise accordingly, or execute trades that don’t fit within their framework of computer logic.

What they can do, though, is to help automate your international investments in a low-risk way, typically by helping you invest in ETFs (exchange-traded funds). These are funds that invest in a variety of assets, which might include stocks, bonds, gold and more. Most of the ETFs that robo advisors deal with are US or worldwide.

In short, robo advisors are simple investment instruments. They’re meant to let you invest passively in the longer-term, not to make short-term gains by buying and selling frequently.

What are the robo advisors in Singapore and how much are their fees?

Robo advisors started rising in popularity in 2016. The “OG” robos were Stashaway and AutoWealth, but lots of banks and startups jumped on the bandwagon in the past couple of years. For your convenience, here are the main local options for Singapore investors:

Robo advisor Annual fee* Minimum investment
Syfe 0.65 per cent None
Stashaway 0.8 per cent None
AutoWealth 0.5 per cent + US$18 (S$24) $3,000
DBS digiPortfolio 0.75 per cent $1,000 or US$1,000
OCBC RoboInvest 0.88 per cent US$100
SquirrelSave 0.5 per cent $1
Philip SMART Portfolio 0.5 per cent S$5,000
EndowUs 0.6 per cent $10,000
Kristal.AI 0 per cent $100

* Some notes on robo advisor fees:

Many robos charge tiered fees, i.e. the more you invest, the cheaper they charge. But since this article is aimed at beginner investors, we’ve compared the lowest tier (usually up to $20,000 invested).

Robo advisor fees are supposedly “all in”, but there might be additional costs depending on what products the robo invests in. For example, if it invests in ETFs, there might be a minor (0.1per cent or less) ETF fee hidden in there.

Which are the best robo advisors for beginners?

Each robo advisor uses a different investing strategy, so the portfolios generated (and therefore your returns) will differ. There are also differences in the experience of using each platform — some are buggy while others are beautifully designed.

However, we can compare robo advisors in terms of their fees and minimum deposits. The following ones are beginner-friendly as they have low fees and practically no minimum:

Use promo code MSFEEWAIVER to get 0 per cent fees on Syfe for the first 6 months — the perfect low-risk way to test things out. Thereafter, Syfe charges a low 0.65 per cent per annum for up to $20,000 in investments. Invest more and the fee goes down.

If your starting capital is small, you can also opt for the friendly-looking SquirrelSave. It requires a minimum investment of just $1, so you can get started with whatever spare cash you have on hand, and it has a very low fee of 0.5 per cent.


With a lovely app interface and no minimum deposit, it’s no wonder Stashaway remains a popular choice among newbies. The annual fee of 0.8 per cent is a bit higher but it’s still definitely a viable option for getting your toes wet. 


OCBC RoboInvest is really convenient if you’re already an OCBC customer, and it doesn’t require a huge amount to start with — just US$100. But as you’d expect from a bank rather than a startup, management fees are slightly on the higher side.


Which are the best robo advisors for serious investors?

While most of these robo advisers are meant to be entry-level platforms for people who want the simplest possible way to invest their money, there are more sophisticated options for more serious investors.

AutoWealth has a high minimum investment amount, and it’s harder to use than, say, Stashaway. On the other hand, it assigns each user a personal advisor who will be able to offer support via text.


Kristal.AI charges some of the lowest fees in Singapore, but we wouldn’t recommend it to beginners as it’s quite a complex product. For example, you can customise your own “multi-asset strategy” to deliver higher returns at higher risk.


With a super-high barrier to entry, EndowUs is definitely not for newbies who just want to put in $100 to try. But it’s one option if you’d like to invest your CPF and SRS funds.


DBS digi Portfolio and Philip SMART are both robo offerings from traditional banks/brokerages. They may not be as approachable or cheap as the other robo advisors on this list, but you can give them a shot if you prefer the security of a brand name.


In a nutshell, yes, robo advisors are regulated, but they get special leeway from the MAS.

MAS requires robo advisors be licensed under the Securities and Futures Act (SFA) and/or the Financial Advisers Act (FAA). Which one(s) apply depend on the robo advisor’s “scope of activities and business model”, but the point is that you should find it in either one or the other.

At the same time, MAS doesn’t want to be impede digital innovation, so in Oct 2018, they also loosened the licensing criteria:

Robo advisors can be licensed under the SFA even if they lack the usual corporate track record requirements, provided they have board/senior management members with relevant experience in fund management and technology, offer portfolios that comprise only non-complex collective investment schemes; and submit to an independent audit after the first year.

They can also be licensed under the FAA while being exempt from having to collect full data on a client’s financial status. However, they’re required to put in some form of data-gathering measure to prevent recommending the wrong types of investments.

Robo advisors also get special leeway to pass their clients’ orders to brokerages without having to obtain an additional capital markets services license under the SFA.

These relatively relaxed rules mean it’s fairly easy for robo advisors to operate regardless of their performance history, so be careful when choosing one.

What are the pros of using robo advisors?

Just as online shopping has dealt a heavy blow to brick and mortar sales, an array of advantages have led to a surge in popularity of robo advisors, including the following:

Easy and convenient

Ease of use is one big reason people prefer using robo advisors. You don’t actually need to research what to invest in, deal with the intricacies of the stock market, submit heaps of paperwork, or even execute the investments yourself. You can simply sign up online, create a profile and let the app do the rest.

Low barrier to entry

Not that much money in your piggy bank? That’s OK — many robo advisors let you invest if you only have a small amount of money. This is good for those who want to try investing and not worry about losing a fortune on the stock market.

Can be cost-effective

Robo advisors charge a percentage of the total you invest, so it doesn’t matter how big or small or frequent your transactions are. If you’re just starting to invest in small amounts to build up a habit of investing, this fee structure can be very forgiving. You also don’t get charged for depositing or withdrawing, so you won’t lose money to fees unnecessarily.

Customisable to some degree

Thanks to robo advisors’ algorithms, they can offer advice that is customised (to a limited degree) according to your needs. It can take into account details such as risk appetite, income/cash-out needs, financial goals and more, to offer advice fine-tuned to your needs. Of course, don’t forget that the efficacy of the advice given depends on the sophistication of the algorithm.

Diversified portfolio

Maintaining a diversified portfolio is essential to reducing risk, as you won’t go broke if one or two of your assets crashes and burns. Robo advisors operate like funds by offering a mix of assets, except that instead of human analysts managing the assets, it’s an algorithm doing the work.

Low commitment

Unlike other investment funds or savings products with lock-in periods, you can choose to liquidate your robo advisor investments at any time with no penalties. There’s nothing stopping you from taking out your funds at any point and switching to another robo advisor, if you find a more suitable one later on.

What are the cons of using robo advisors?

Of course, it’s not all rainbows and unicorns when it comes to robo advisors. As you get more confident about investing, you’ll start noticing their limitations, such as the following:

Inability to deviate from the algorithms

With robo advisors, investment choices are only customisable up to a certain point, and cannot deviate from the algorithm’s parameters. So if you want full control over every single investment decision, robo advisors are probably not the best for you.

More expensive than DIY

While robo advisors generally charge lower fees than investment managers, you might still end up paying quite a bit in fees if you invest significant sums. That’s because they charge a percentage of your total investment.

On the other hand, if you DIY your own investment portfolio, you get charged only per transaction. That might work out cheaper for buy-and-hold investors.

ALSO READ: Ultimate Robo advisors Singapore guide. Key facts you need to know (2020)

Some people do stick with robo advisors forever, simply because you can’t beat their ease of use and intuitive platforms. But if you’re interested in DIY investing, here are some articles you might find useful:

Want to always be on top of what’s happening in the market and get up-to-date news? You can now do it easily all in one place with SGX’s new Telegram Channel (ID: SGX Invest). Just simply click here to find out more!

What sorts of investors are robo advisors suitable for?

As you can see, there are some disadvantages mixed in with the advantages. So what kind of person are robo advisors ideal for? Well, you might want to consider using one of the following apply to you:

You don’t know how to invest globally

One reason robo advisors have become so popular is that they offer an “investment for dummies” experience for those who have no idea how to get started.

They’re easy to use and require no knowledge of how global stock markets work. You just transfer your money, let the robo advisor invest using their algorithm and hope your wealth grows.

You are lazy and want a completely passive system

No matter how much or how little you know about investing, if you’re so lazy that you wouldn’t lift a finger to invest if someone didn’t do it for you, robo advisors can manage your investments for you with almost zero effort. Rebalancing can also be done automatically. Just know that you’re paying a price for the convenience.

You’re looking for a cheap and easy way to start investing

Don’t have much capital or know-how, but want to start investing anyway? Instead of waiting years till you finally earn enough money or read enough books to qualify as an investment expert yourself, it can be a lot easier to simply use a robo advisor. Putting off investing all your life because you don’t know how can leave you worse off in the end.

You’re looking for a lower cost alternative to your investment manager

If you’re already using an existing investment manager and haven’t been too pleased with their performance or think their fees are too high, you might want to consider switching to a robo advisor.

This article was first published in MoneySmart.