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 26 Apr 2022, they launched their new robo advisor christened, Saxo WealthCare. According to Saxo, it’s “more than a robo-advisor”—they prefer to use the term “digital wealth manager”.
Is there really a difference between Saxo WealthCare and the usual robo advisors like Syfe, Stashaway and Endowus? We take a look at Saxo WealthCare’s fees, minimum investment amount, and how it compares with its competitor robo advisors.
Saxo WealthCare’s fees and minimum deposit
Saxo WealthCare product & management fees
How does Saxo WealthCare work?
How is Saxo WealthCare different from Syfe, Endowus and Stashaway?
Fees—Saxo WealthCare vs Syfe vs Endowus vs Stashaway
Who is Saxo WealthCare suitable for?
Saxo WealthCare vs Saxo Regular Savings Plan (RSP)
Saxo WealthCare Review: Conclusion
1. Saxo WealthCare’s fees and minimum deposit
Personalised portfolio with prioritised goal plan
Automatic rebalancing with the option of adding protection to safeguard your investment in periods of market volatility
No lock-in period
The portfolio have a higher ESG (environmental, social and governance) rating than the stock market average
Choose from three trading styles: Global Growth, Asian Growth, Sustainable Growth
If you think that Saxo Wealth Care can grow your $0.30 investment to $3 million, sorry to burst your bubble, but you need to invest a minimum of $25,000. If that sounds like a lot to you, it is. The minimum investment amounts from other robo advisors we know come nowhere close—AutoWealth‘s $3,000 is the next highest amount.
You also have to pay management fees and product fees, which realistically come up to 1.2% for regular retail investors like you and me (with portfolios under $50,000).
2. Saxo WealthCare product & management fees
Here’s a breakdown of the management and product fees you must pay to use Saxo WealthCare:
0.17% to 0.45%, depending on product mix
0.62% to 1.2%
Let’s say you’ve invested $30,000 into Saxo WealthCare. You’ll have to pay management and product fees of up to $360 per year.
3. How does Saxo WealthCare 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. 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. TLDR; they’re legit!
Saxo Wealth Care 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.
4. How is Saxo WealthCare different from Syfe, Endowus and Stashaway?
So far, Saxo WealthCare sounds suspiciously similar to your run-of-the-mill robo advisor. But there three key things that set it apart:
a) Saxo WealthCare’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 Saxo WealthCare, 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 Jan 2025, need money for renovation, COE ending soon, want to buy new car in May 2024, want to upgrade condo after BTO MOP in Jan 2030, want $15,000 every December for annual gambling trip to Macau, and so on.
c) Saxo WealthCare’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.
5. Fees—Saxo WealthCare vs Syfe vs Endowus vs Stashaway
Here’s a comparison of the range of management and product fees charged by Saxo WealthCare and their main competitors. Not mentioned in this comparison are miscellaneous fees such as currency conversion, clearing and trading access fees etc.
0.75% + 0.17% to 0.45% product fees = 0.92% to 1.2% (total)
0.35% to 0.65% + 0.15% to 0.24% ETF fees = 0.5% to 0.89%
0.05% to 0.6% + unknown fund fees
0.2% to 0.8% + 0.15% to 0.25% ETF fees = 0.35% to 1.05%
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 $25,000 (Saxo WealthCare’s minimum investment amount), you will most likely have to pay the highest fees.
If I’m just plonking in $25,000, and assuming in the long run (not factoring promotions in) I have to pay the highest fees based on the table above:
Saxo WealthCare: $300
Endowus: $150 + ?
If you prefer certainty, and not to have to deal with surprises, Saxo WealthCare promises that the management fee and product fee that you see listed here will be the only fees you’ll be paying. So… no hidden fees.
6. Who is Saxo WealthCare suitable for?
Saxo WealthCare 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.
You do need $25,000 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 Saxo WealthCare? 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, Saxo WealthCare 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.
Not saying any product is bad here. Which robo advisor you pick (or withdraw and switch to) largely depends on your personal needs—some prefer Gucci, some prefer prawn mee, right?
7. Saxo WealthCare vs Saxo Regular Savings Plan (RSP)
Saxo has another product called the Regular Savings Plan that could actually serve as an interesting alternative to Saxo WealthCare.
How it works is that you make regular contributions, starting from $100, 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 $25,000 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.
8. Saxo WealthCare Review: Conclusion
Saxo Wealth Care 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. Their method of determining risk tolerance is also a bit more thorough than other robo advisors’.
They do, however, require a $25,000 minimum investment. Saxo WealthCare is thus not for regular folks searching for the cheapest/most affordable robo advisor on the market, but rather for those who have the spare cash and are looking for premium functions.
Interested in other robo advisors? We compare all the robo advisors in Singapore for you here
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Original article: Saxo WealthCare Review: Is This The Best Robo Advisor In Singapore?.
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