Launched in 2017, AutoWealth has been tested and proven its resilience time after time, even during the COVID-19 recession. It may fare poorer to its rival StashAway with regards to the absence of a mobile app and user friendliness in general, but AutoWealth shines when it comes to transparency and performance. Not to mention, something unheard of – giving the robo advisor a human touch. Just like the rest of our reviews, here is an AutoWealth promo code to kickstart your automated and transparent investments!
TL;DR: Here is Autowealth’s key features at a glance!
|Fees||0.5% + 18 USD||0.70 - 1.50% (Assets below 50,000 SGD)|
|Strategy||Market-returns strategy referencing established benchmarks||Black Box strategy that may result in negative performance surprises|
|Human Touch||You're Never Alone - You will have a dedicated wealth manager just one WhatsApp message away!||Error 404 Not Found|
|Custodian Account||What's Yours is Yours - In your legal name for your legal beneficial ownership only (Saxo)||Co-mingled custodian account, Oops!|
|Transparency (Transactions, Dividends)||Comprehensive reports for your assets to be generated on demand||Transaction and investment holding data transparency varies from robo to robo|
The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security.
Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult a professional.
Hybrid Model With A Unique Human Approach
One major difference that AutoWealth sets itself apart from its rivals would definitely be the VIP privileges you will be enjoying with your personal wealth manager.
AutoWealth is unique with its hybrid model consisting of both technology and human touches. Regardless of the amount of money invested, big or small, a dedicated human wealth manager is assigned to you and he is always one whatsapp message away.
Understandingly, not everyone might be comfortable with the concept of having their investments being handled solely by technology, and this is why AutoWealth’s clients are able to attach a face to their investments.
You will have someone to turn to if and when the robos cannot answer your queries. If you think this model makes you the most comfortable and gives you a peace of mind, then AutoWealth will probably be the better option for you.
In contrast, several other robos are fully digital and customer support is generally helmed by a team, instead of clients having a dedicated human wealth manager.
Passive versus Active Investing (Portfolio Management)
If you didn’t know by now, having an active wealth manager to manage your portfolio doesn’t necessarily translate to a higher yield.
In fact, the efficient market hypothesis has been largely true – the current price of a stock is fully representative of all available information about the particular company.
This hypothesis implies that fund managers that actively manage your portfolios will never be able to beat the market over a sustained period of time. He or she may help you fetch a higher than average return (e.g. S&P indices which are passive benchmarks) today, but no one is certain about their performance tomorrow.
And of course, although technical analysis is heavily relied upon by day traders, past performance is never a good indicator of future results.
In essence, this is why the Guidesify team doesn’t make any performance comparisons across the robo platforms nor do we boast about our past performances in a particular robo; it simply wouldn’t do justice to any of the robo advisors mentioned in our reviews.
What About AutoWealth’s Adopting A Paggro (Somewhat Passive) Approach?
Now that we established that passive benchmarks generally outperform most, if not all active investment managers, here’s why AutoWealth’s strategy is favoured by our team.
A passive portfolio mimics the performance of a benchmark or index, which means you earn when the mimicked index goes up, and lose when it goes down.
Such passive strategies are also commonly known or structured as what we call an exchange-traded fund (ETF), a mutual fund, or a unit investment trust.
And you guessed it! Fees are much lower than active management strategies.
AutoWealth takes it up a notch.
Taking a passive approach in their clients’ portfolios, the portfolio is more than adequately diversified across thousands of stocks via index-tracking ETFs and 600 government bonds in 4 major geographical regions (US, Europe, APAX & Emerging Markets) and all major industries.
The proportion of stocks to government bonds is dependent on the risk profile set by the client.
Next, here’s where AutoWealth still takes up a more active stand.
It makes timely rebalances to your portfolio for the purposes of maintaining a consistent risk profile and managing portfolio risks.
This happens whenever key events are deemed by AutoWealth serious enough to mandate such a rebalance to deal with any recent volatility experienced by the market.
Broadly speaking, AutoWealth usually takes a passive stand, but the active rebalancing may result in selling government bonds at high prices, buying equities at ‘discounted’ prices and even getting out of a sticky situation in time.
Last, you can view past transactions that AutoWealth has made on your behalf or control your own investments if you disagree with their strategy (via Saxo). This is absent in any of the brokers or fund managers we have seen so far.
What are AutoWealth’s Fees and Minimum Investment?
When it comes to paying investment fees, saying ‘My company pays me’ simply isn’t enough. While some brokerage accounts charge transaction fees for each trade, having a robo advisor to manage your money charge a fixed or tiered annual management fee structure instead.
This prevents any form of agency problem from arising.
You have the right to know how much AutoWealth is being compensated from your investments.
According to Investopedia, fees tend to range from 0.10% to more than 2% of assets under management (AUM).
As a general rule of thumb, the more actively managed a fund is, the higher the fees would be.
Like other robo-advisors, the heart of AutoWealth is committed to transparency and staying true to their social cause of helping everyone and anyone (including yourself) grow their wealth.
Through the help of technology, AutoWealth is able to provide a full range of high-end customised wealth advisory service at perhaps a quarter of the usual cost of traditional unit trusts (mutual funds) or human financial advisors.
With that, AutoWealth charges a 0.5% per annum management fee.
The platform fees are also fixed US$18 per annum and you are able to enjoy an infinite number of deposits, withdrawal and rebalancing without paying a single cent more.
|Portfolio Value||Variable Management Fees (@ 0.5%)||Fixed Platform Fees||Total Fees||Effective Fee Rate|
Rest Assured, You will Not Lose Your Money Even If…
We understand that you may be anxious when it comes to investing your hard-earning money but to be frank, who isn’t?
This is why every AutoWealth client will also be required to open a legally segregated Saxo custody account where your money will be safely stored. (Saxo is a Danish bank but they also hold a CMS license in Singapore).
Your money will not be held by AutoWealth at any point in time while Saxo holds your money with HSBC and Citibank.
In the unfortunate event that AutoWealth becomes insolvent (though unlikely), you will be able to access your money directly through your own Saxo. On the other hand, in the event that Saxo becomes insolvent, the high court will freeze Saxo’s account and return the monies to the clients after the ownership is determined.
Therefore, rest assured that you will have 100% protection if anything were to happen.
This is also another contrasting factor that sets itself apart greatly as you have total ownership of your assets, which the Guidesify Team greatly appreciates.
In several other robo-advisors, you may find that all clients’ monies are held under a single account that legally belongs to the robo-advisors.
Not to say that other robo-advisors do not have a safe structure, but not everyone may be comfortable with this structure as we understand that everyone wants legal ownership of their assets and monies.
Is AutoWealth For You? Yes, If You Prefer A Very Defensive Yet Robust Strategy
No matter how badass you think you are, there is always a badass bigger than you (-Amir from Netflix’s Extraction).
Use AutoWealth if you are okay with it not fetching the highest returns for your money when times are good, but are more than satisfied with the notion of enough with that level of defence and hedging in their investment strategy.
Again, here is an AutoWealth promo code to kickstart your automated and transparent investments!
Or to put it crudely, use Autowealth if you like the idea of investing with a peace of mind when times are tough and your YOLO day trading friends come crying to you about their failed r/wallstreetbets.
You can most likely sit back and relax with a robo advisor like AutoWealth that has proven itself to be COVID-19 proof.
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