SaxoWealthCare review: Is this the best robo advisor in Singapore?
Is Saxo's new robo advisor, Saxo Wealth Care, the best robo advisor in Singapore in 2022?
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PUBLISHED ONMay 10, 2022 9:53 AMByJoanne Poh
Robo advisors are having their moment in the sun, now that MAS has banned cryptocurrency trading services from advertising in Singapore. Ads for robo advisors are plastered everywhere, including SBS buses and taxis.
Keen to get a slice of the pie, Saxo has also entered the fray. On April 26, 2022, they launched their new robo advisor christened, SaxoWealthCare. According to Saxo, it's "more than a robo-advisor" — they prefer to use the term "digital wealth manager".
But is that just glorified marketing? Is there really a difference between SaxoWealthCare and the usual robo advisors like Syfe, Stashaway and Endowus?
Should I, too, start calling myself a "digital discourse architect" instead of lowly writer? Let's find out.
SaxoWealthCare's fees, minimum deposit & promotions
If you think that SaxoWealthCare can grow your $0.30 investment to $3 million, sorry to burst your bubble, but you need to put down a minimum deposit of 3,000 SGD.
You also have to pay management fees and product fees, which realistically come up to 1.2 per cent for regular retail investors like you and me (with portfolios under $50,000).
SaxoWealthCare product & management fees
Here's a breakdown of the fees you must pay to use SaxoWealthCare:
| Date | Until July 31, 2022 | After July 31, 2022 |
|---|---|---|
| Management fee | ||
| Investment amount | ||
| First 50,000 SGD | 0.45 per cent | 0.75 per cent |
| Next 50,000 SGD | 0.45 per cent | 0.70 per cent |
| Next 100,000 SGD | 0.45 per cent | 0.60 per cent |
| Next 800,000 SGD | 0.45 per cent | 0.55 per cent |
| Above 1,000,000 SGD | 0.45 per cent | 0.45 per cent |
| Product fee | 0.17 per cent to 0.45 per cent, depending on product mix | 0.17 per cent to 0.45 per cent, depending on product mix |
| Total cost | 0.62 per cent to 0.9 per cent | 0.62 per cent to 1.2 per cent |
Let's say you've invested $30,000 into SaxoWealthCare. After July 31, 2022, you will pay management and product fees of up to $360 per year.
SaxoWealthCare launch promos
As you can see, there are different prices before and after July 31, 2022. That's because they are running a launch promo, ending on July 31, during which all users pay just 0.45 per cent interest.
When the promo ends, users will be charge tiered management fees based on the amount of money they're investing.
By the way, SaxoWealthCare is currently holding a lucky draw. If you sign up and trade before Sept 7, 2022, you stand the chance to win 888 SGD in a weekly draw, or 8,888 SGD in a monthly draw.
Once you're a customer, you can re-enter the draw every time you earn 100 Saxo Rewards points.
How does SaxoWealth Care work?
If the name Saxo sounds familiar to you, it's because Saxo Group is the company behind the popular Saxo Markets online broker and trading platform.
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The latter was launched in 1998, so they've been around a while. Saxo Markets is regulated by MAS in Singapore and the company is considered a well-known and reputable broker worldwide.
In other words, they're legit.
SaxoWealthCare is their latest product, recently launched in Singapore.
It's modelled after robo advisors, meaning you just put in a stack of money and instead of human financial advisors watching the stock market and helping you buy and sell stocks/ETFs/bonds/whatever, everything is done by an algorithm.
As a SaxoWealthCare user, you have to choose one of three profiles:
- Global Growth (mimics the trajectory and direction of global markets)
- Asian Growth (focuses on Asian ETFs, equities and bonds)
- ESG (focuses on sustainability)
Next, you take a quiz based on behavioural finance to determine your risk tolerance.
This approach is more thorough than that of robo advisors like Syfe or Stashaway, which just get you to drag and drop your level on a risk tolerance meter when the average user has no way of knowing where their risk tolerance levels lie in relation to the rest of the world.
Conversely, SaxoWealthCare's quiz helps you determine your risk appetite/aversion without forcing you to slap on an arbitrary number.
How is SaxoWealthCare different from Syfe, Endowus and Stashaway?
So far, SaxoWealthCare sounds suspiciously similar to your run-of-the-mill robo advisor. But there three key things that set it apart:
a) SaxoWealthCare's portfolios are balanced daily
Some robo advisors like Syfe and Stashaway only balance your portfolio once or twice a year, or like Endowus wait until your ratios pass a certain level before rebalancing.
With SaxoWealthCare, your portfolios are obsessively rebalanced every single day, which means that your asset allocation will always be in line with your risk tolerance.
b) Lifelong budgeting tool/calculator
When you log into your account, the main dashboard displays a lifetime budgeting calculator that you can use to plot your long term financial goals.
This helps you maintain a portfolio that actually serves your goals, which can be marked as aspirational or important.
An algorithm based on Monte Carlo simulation's modelling solutions and behavioural finance then works to map out all the potential outcomes and lets you know if your goals are achievable or not.
You can input all sorts of life milestones and goals, however frivolous, like: BTO key collection in January 2023, need money for renovation, COE ending soon, want to buy new car in May 2022, want to upgrade condo after BTO MOP in January 2028, want $15,000 every December for annual gambling trip to Macau, and so on.
c) SaxoWealthCare's portfolio protector
This free function, which you can tick and opt into, makes the app prioritise important goals and de-prioritise aspirational goals during market downturns.
The app will then rebalance your portfolio and reduce the weight of risky assets to limit losses. When market conditions improve, the algorithms will rebalance again.
So, for instance, your BTO money and renovation fund might become priorities, but your gambling trip to Macau might have to take a backseat until the market improves.
SaxoWealthCare vs Syfe vs Endowus vs Stashaway fees
Here's a comparison of the range of fees charged by SaxoWealthCare and their main competitors.
| SaxoWealthCare | Syfe | Endowus | Stashaway | |
|---|---|---|---|---|
| Total fees | 0.62 per cent to 1.2 per cent | 0.35 per cent to 0.65 per cent | 0.2 per cent to 0.8 per cent | 0.25 per cent to 0.6 per cent |
Fees vary according to how much money you put into the app (when you put in more money, you pay a lower tier of fees). If you are investing $20,000 or less, you will most likely have to pay the highest tier of fees.
As you can see, SaxoWealthCare's fees are significantly higher than what "true" robo advisors are charging. Clearly, there is a price to pay for the extra perks like daily rebalancing and the budgeting tool.
Who is SaxoWealthCare suitable for?
SaxoWealthCare was designed for the mass public, from the fresh grad who's learning how to save money for the first time, to the seasoned investor who's just playing around with new financial products.
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You do need 3,000 SGD to start an account, however. If you're really strapped for cash, you might need to pick a robo advisor with a lower or no minimum deposit, such as Syfe (no minimum), Endowus ($1,000) or Stashaway (no minimum).
So, should you sign up for SaxoWealthCare? If you like the convenience and no-brainer nature of robo advisors and are also willing to pay higher fees for more frequent rebalancing and the wealth planning aspect, SaxoWealthCare might be a good match.
But if you just want a no-frills robo advisor to grow some spare cash with, Syfe, Endowus or Stashaway would be more affordable.
SaxoWealthCare vs Saxo Regular Savings Plan (RSP)
Saxo has another product called the Regular Savings Plan that could actually serve as an interesting alternative to SaxoWealthCare.
How it works is that you make regular contributions, starting from 100 SGD, to the plan, and the money is invested in a professionally managed portfolio (rather than one managed by an algorithm).
This is a viable alternative if you don't have a lump sum of at least 3,000 SGD to invest and wish to use the dollar cost averaging method to set aside a little bit every month.
However, do note that there are lots of RSPs from various brokers and banks, so be sure to compare your various options.
SaxoWealthCare review: Conclusion
SaxoWealthCare is basically a souped-up robo advisor that offers some extra perks — daily portfolio rebalancing, a budgeting tool/calculator and the option to protect your portfolio during market downturns.
ALSO READ: UOBAM Invest review: Late to the robo advisor game, but is it any good?
Their method of determining risk tolerance is also a bit more thorough than other robo advisors'.
They do, however, charge higher fees and require a 3,000 SGD minimum investment. SaxoWealthCare is thus not for users searching for the most affordable robo advisor on the market, but rather for those who're willing to pay a bit more for premium functions.
This article was first published in MoneySmart.