Updated: Part 2 of my review is up – click here to see it. In the post, I talk about more advanced features that perhaps not all users may need such as SAXO view-only clients and exchange rates.
Updated: Part 3 – In the post, I briefly mentioned AutoWealth portfolio re-balancing in action when the market is volatile.
Howdy! I might have mentioned before that I’m taking the first year to evaluate all three retail robo-advisors that we have in Singapore. They are what I affectionately call the Singaporean ASS – AutoWealth, Smartly and StashAway.
Jokes aside, I recently opened my AutoWealth account after attending one of their workshops to find out more about them. Well, I learnt quite a few things along the way. I figured you would be interested in them!
AutoWealth has a Financial Advisers License (FA100064-1) whereas StashAway holds a Capital Markets Services License (CMS100604-1).
I think Smartly is simply the technology provider (VCG Partners is the license holder) and thus, itself does not hold either of the two license. To the best of my knowledge, a robo-advisor in Singapore would require one of the two license type. I don’t know the differences between them though. Help me out if you do.
Personal Wealth Manager
AutoWealth has a personal financial advisor or wealth manager that is assigned to each client. The human touch is what separates it from Smartly and StashAway. They call it the hybrid approach, and you will meet him/her when you open your account. There is a variety of meet-up locations in Singapore that you can choose at your convenience. Even after account opening, if I have any questions pertaining to AutoWealth, he is only one WhatsApp message away.
Stashaway and Smartly do not have such as arrangement.
Fractional Units of ETFs
Both Smartly and StashAway pools investors’ money and invests them as a whole. This means that investors can end up having fractional units of ETFs. That’s how the asset allocation can be so precise.
AutoWealth, as part of the account opening process, requires clients to open a personal Saxo Capital trading account (the entire process is handled for you) and authorize AutoWealth to use the account to trade on behalf of the client once the account is funded. After opening my account, I received the following from Saxo :
Dear Saxo Capital Markets client
On a daily basis, you will receive a “Trades Executed” report relating to your activity on your account(s) on the previous business day.
On a monthly basis, you will receive a “Trades Executed” report, an “Account Statement” report and a “Financial Statement” report all relating to your activity on your account(s) in the preceding month.
On a quarterly basis, you will receive a “Trades Executed” report, an “Account Statement” report and a “Financial Statement” report all relating to your activity on your account(s) in the preceding quarter.
Each client’s account has physical segregation from other clients. This means that you will NOT end up with fractional units of ETFs. This point is important, and this is why you need to invest a minimum of S$3,000. This ensures that the portfolio is meaningful in the sense that they sort of reflect the equities/bonds allocation. For example, my portfolio of six ETFs is about 56% equities and 44% bonds, instead of 60/40, because one unit of ETF is fairly “expensive” for the lack of a better word. As the portfolio size grows, the portfolio will be more and more accurate in reflecting the desired allocation.
To me, this also helps to explain the unique fee structure of a flat USD$18 platform fee + a low 0.5% advisory fee.
The Closest Thing To Passive Investing
AutoWealth uses a proprietary investment strategy. What AutoWealth does is to create a simple and no frills, Bogleheads two-fund portfolio comprising of global equity (MSCI index) and global government (US + International) bonds at your desired allocation.
I see this as the true passive portfolio because one does not deliberately assign heavier weightage of equities to one’s country of residence like what I’m doing for my Kevin Boglehead portfolio. In fact, this is my preferred investment methodology out of the three robo-advisors. Pure market returns.
Simple in theory? Yes. Go ahead and DIY with a global equity ETF such as VT (if you don’t wanna dissect) and bonds ETFs such as IGOV and IEF and you’re sort of replicating it. Just put in money and re-balance periodically.
Then again, Spaghetti aglio e olio has an extremely simple recipe, but how many restaurants can say they make a good one? It took me years to perfect my version of it.
With AutoWealth, you can opt to receive dividends or reinvest them automatically. Some of you like to be given a choice, I know.
Estate Taxes Concerns
To side-step the potential problem of estate taxes (since the portfolio are all US-listed ETFs), just convert your personal account to a joint-account (with your spouse, for example).
Because people like to see proof (something I learnt when dabbling with alternative income), I will attach a screenshot of my account for proof of investment.
Just like what I did for Smartly and StashAway, it’s my hard-earned money going right into AutoWealth.
What I Think
I like what I’m seeing with AutoWealth. It’s ticking all the right boxes in my head and I foresee it being a really strong contender for my money. Now that I have my half-year free trial (via referring a new client) with StashAway and one-year free trial (see below) with AutoWealth, all I have to do is to sit back and relax.
Is there anything else that you would like to know about AutoWealth? Let me know with a comment below and I’ll try to find out for you.
Never underrate the importance of asset allocation. Investing is not about owning only common stocks. Nor are historical stock returns a sound guide to future returns. Consider not only the probabilities of future returns on stocks, but the consequences if you are wrong.
John C. Bogle
Founder and Former Chief Executive – Vanguard Group
AutoWealth Referral Code (Friends & Family Programme)
You might be interested in a referral code / deal / discount / promotion which will net you a SGD$20 credit when you sign up. I have a running promotion for readers of my Turtle Investor blog and there is only one way to enjoy this perk that is valid forever! Yep, that’s right – there is no expiry to this exclusive referral code. There’s no “get-in-before-it-is-too-late” mind games, and there is no need to for wait for Valentine’s Day, Labour Day, National Day, Black Friday or Cyber Monday special deal. Take all the time you need to think about it.
If you are still undecided, check out events (such as the Seedly one I attended in Jul ’18) that AutoWealth is featured in, and take the chance to get your burning questions answered.
AutoWealth has kindly provided me with a referral code TurtleInvestor which you can quote when signing up to enjoy the SGD$20 direct top-up. If you sign up via this method, I will also get an one-time $20 direct top-up. Use this code if you would really like to : TurtleInvestor
I’m not going to blindly promote AutoWealth just to get the $20 credit. Robo-advisors ain’t a sprint. It’s a marathon. Don’t start, and don’t sign up if you’re not going to hold for ten or fifteen years 🙂
Do note that the reward is subject to a “claw back” if the participating accounts are closed in less than 3 months and accounts must be funded within 2 weeks of account activation. As always – capital is always at risk when invested and you are making a decision of your own free will to start investing with AutoWealth.
Terms & Conditions
- Top-ups will only be disbursed when the participating accounts are funded with minimally S$3,000.
- The reward is subject to a “claw back” if the participating accounts are closed in less than 3 months.
- AutoWealth reserves the rights to terminate this promotion without prior notice.
- You understand that your capital is always at risk when invested.
From time to time, AutoWealth does reboot its Family and Friends programme so keep an eye out on that and you can easily sign up and get the credit without using the referral code.
Updated : To the anonymous person who used my referral code, I don’t know who you are, but thank you for the $20 credit 🙂
Updated : Valid till 30-Nov-2018 23:59 Hrs, AutoWealth 3rd Year Anniversary Celebration $1000 Giveaway! I am NOT eligible even if you use my referral code, so the benefit is all yours 🙂
Old Referral Programmes (Hidden To Keep The Blog Post Clean)
Current running promotion : S$51 Free Top-Up for a Robo-Investing Account
Use Referral Code : TurtleInvestorNS51 or ThankYouNSMen
Do take note of the terms and conditions :
- Applicable to only account opening requests submitted between 1 Jul 2018 to 9 Aug 2018 by SAF Full-time national servicemen (NSFs) and national servicemen (NSmen)
- The participating account needs to be funded with minimally S$3,000 within 2 weeks of activation
- The S$51 cash top-up is subject to “claw-back” if the participating account is closed in less than 3 months
- Kindly enter “ThankYouNSMen” under your referral code during account opening. You will receive the S$51 top-up once we have verified your NSF/NSmen identity when you submit your ID as part of account opening.
Both codes will get you the same amount of S$51 cash top-up – there is no difference to you.
If you read my posts and found them useful, feel free to use my promo code and I will get a S$20 top-up too. However, you may wish to help AutoWealth save S$20 and lower their operating costs, then please use their official referral code instead 🙂 Either way, it’s gonna increase their asset-under-management (AUM) in the long term and likely, result in lower costs for everyone.
If you are not in the NSFs/NSmen category, not to worry! The AutoWealth Friends & Family Programme has been extended to 31st Oct 2018. Use Referral Code : TurtleInvestor
- Updated 16th July 2018 : The family and friends promotion (S$20 cash top-up) is back – valid till 31st Oct 2018. >> use TurtleInvestor (for everyone)
- Updated 1st July 2018 : The NS51 promotion (S$51 cash top-up) is valid till 9th Aug 2018. >> use TurtleInvestorNS51 or ThankYouNSMen (for NSFs/NSmen only)
Updated 2nd May 2018 : The sign-up promotion has been extended to 30th Jun 2018 by Autowealth.[status=ended]
Remember, there is absolutely nothing stopping you from using method #1 to get the $20 bucks with your friends and family. In fact, I encourage it!
I don’t like method #2 because there is always gonna be folks who come to me and say, “.. but you recommended it! Now platform so-and-so isn’t doing well. Hmpf.” when I helped you to save $20 in the first place.
AutoWealth is having its Two Year Anniversary Celebration and they are giving away ONE YEAR FEE WAIVER to the 1st 200 sign ups! If you are interested, all you have to do is – Book an appointment by completing their questionnaire Open an account Fund the account within 2 weeks from account activation Disclaimer : If you’re going for it because of the fee waiver, please confirm with AutoWealth that you are eligible before sign-up as I have no visibility over the remaining quota. There is nothing in it for me 🙂 The above anniversary promo has ended.