Non-US robo-advisors

From Bogleheads
(Redirected from Non-US Robo-advisors)

A robo-advisor is an online "wealth management" service that provides automated, algorithm-based portfolio management advice. They usually do not get involved in more personal aspects of wealth management, such as tax planning, retirement planning or estate planning.

Overview

Robo advice is a digital customer interface for identifying the most suitable risk profile for an investor. A web-based or app-based input template gathers customer data, investment horizon, risk preference and other legally required investor information and then determines a risk profile using if-then logic.

Robo advice digitizes the local jurisdiction classification and the MiFID II suitability and appropriateness assessment normally carried out by a client advisor in a traditional advisory meeting. The robo-advisor then uses this risk profile to create a strategic asset allocation, and an implementation that uses selected specific investment products.

Robo-advisors have now become a part of the financial and investment retail world as more and more new companies spring up across Europe and elsewhere. From the Financial Times:[1]

One-third of new DIY investors are opting for automated online investment apps — so-called "robo-advisors" — instead of fund supermarkets such as Hargreaves Lansdown, as demand for low-cost investment services grows.

— Financial Times

Robo-advisor and investment services have some clear parallels with Bogleheads® investment philosophy, including:

  • Generally passively managed funds;
  • Index funds are used;
  • Risk assessment follows widely accepted norms;
  • Low costs, although these can be higher than a do-it-yourself (DIY) Boglehead portfolio but lower than a traditional advisor-led portfolio;
  • Diversified;
  • Buy and hold formula;
  • Rebalance automatically.

Costs

Each individual company has its own pricing structure, and it is important to check for hidden fees and anomalies when comparing providers. With a robo-advisor, you pay both a service fee and the expenses of the investments it uses.

Therefore you need to compare the total expenses for each platform. Some providers ladder their fees on a descending scale for higher principal amounts.

Each robo-advisor should have a reasonable service fee. It may structured that as a fixed monthly fee, or as a percentage of assets.

Fixed fees

Where robo-advisors charge a fixed monthly fee the range depends upon portfolio size.

Percentage fees

With a percentage of assets structure, you will see fees in the range of about 0.15% to 0.50% of your account size per year.

Other costs

You also pay any expenses associated with the investments used by the robo-advisors. For example, exchange-traded funds (ETFs) have expense ratios, and other costs such as spreads. You pay these costs within the fund itself.

Rationale for using a robo-advisor

Pros

  • It takes out all the research, stress, vigilance and emotions that come with picking funds or stocks and maintaining an investment portfolio yourself. Customer interfaces are usually very user friendly.
  • Offers low cost ETFs (overall costs should be lower than a traditional adviser). Minimum investment amounts are generally low.
  • Simplicity, including matching risk appetite with standard index products.
  • Provides passive indexing setup.
  • Provides "packages" of funds to matching the investor's responses to the risk assessment software. This takes the emotion out of risk assessment.
  • Automatic rebalancing and reports.

Cons

  • Costs are higher than DIY solutions (but generally lower than traditional adviser).
  • It does not account for potential complexity of an individual investors background, for example pensions, other benefits and alternative assets.
  • Limited or no discretion for investor in the choice of funds and the fund costs.
  • If the platform uses active investment approach then results may to diverge from market returns.

Access to robo-advisors

The spread of robo-advisors has led to the proliferation of providers across different jurisdictions. The lists below result from internet searches (as of August 2019), and provide a reference point for a non-US investor. You should carefully carry out your own checks on any provider, to review what is available in their particular location as and when the information is available. Do not rely solely on these lists for investment or other financial purposes. You need to carefully review the available providers, check the suitability of their products, check the statutory and financial position of the company, and perhaps seek advice before committing to any purchase.

Robo-advisors in the EU and UK

List of robo-advisors in the EU and UK[note 1]
Robo-advisor Contact info Locations covered
etfMatic[2] link Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK
moneyfarm link UK and Italy
nutmeg link UK
cashboard link Germany
FeelCapital link Spain
quiron link Germany and Switzerland
wealthify link UK
fiveraday link UK
TrueWealth link Switzerland
GINMON link Germany
EASYVEST link Belgium
Wealthhorizon link UK (as of 2021, closed to new investors)
growney link Germany
swanest link EU
vaamo link Germany (as of 2021, closed, acquired by Moneyfarm)
indexacapital link Spain
scalable link UK (as of 2021, closed to new investors), Germany, and Austria
whitebox link Germany
FundShop link France
easyfolio link Germany
YOMONI link France
Portu link Czech Republic
Finax link Slovakia

Robo-advisors in Australia

List of robo-advisors in Australia[note 2]
Robo-advisor Contact info Locations covered
Stockspot link Australia
investSmart link Australia
Ignition Wealth link Australia, Ireland
Quiet Growth link Australia
RAIZ link Australia
Plenti link Australia
Six Park link Australia
Cashwerkz link Australia
Fincast (non retail) link Australia

Robo-advisors in Canada

List of robo-advisors in Canada[note 3]
Robo-adviser Contact info Locations covered
Wealthsimple link Canada
Nest Wealth link Canada
WealthBar link Canada
Justwealth link Canada
ModernAdvisor link Canada
BMO Smartfolio link Canada
Invisor link Canada
Questwealth link Canada

Robo-advisors in Hong Kong

List of robo-advisors in Hong Kong[note 4]
Robo-advisor Contact info Locations covered
Chloe by 8 Securities link Hong Kong
Kristal.Ai link Singapore, Hong Kong, India, U.A.E.
Aqumon link Hong Kong

Robo-advisors in India

List of robo-advisors in India[note 5]
Robo-advisor Contact info Locations covered
ScripBox link India
5paisa link India
Angel Broking link India
Niyo Money link India
Upwardly link India (as of 2021, merged into ScripBox)

Robo-advisors in Singapore

List of robo-advisors in Singapore[note 6]
Robo-advisor Contact info Locations covered
Kristal.Ai link Singapore, Hong Kong, India, U.A.E.
AutoWealth link Singapore
OCBC RoboInvest link Singapore
UTrade Robo link Singapore
MoneyOwl link Singapore
EndowUs link Singapore
Kristal.Ai link Singapore

Notes

  1. Source: "Robo-advisors EU".
  2. Source: "Australia share-trading".
  3. Source: "Best robo-advisors in Canada". MoneySense.
  4. Source: "Robo-advisor compare".
  5. Source: "Robo-advisor". Wealthpedia.
  6. Source: "Singapore robo-advisors". MoneySmart.

See also

References

  1. "New investors increasingly look to robo advisers". Financial Times (subscription article). November 16, 2018. Retrieved December 17, 2022.
  2. "Transparent, peer-reviewed Digital Wealth Management". etfMatic. Retrieved December 17, 2022. White Paper describing the background to etfMatic's approach.

External links