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Robo-advisors in Malaysia
Which robo-advisor in Malaysia is the best option to manage your investments?
Getting financial advice can be expensive in Malaysia and may not be worth the cost if you don’t have a lot to invest. That’s where robo-advice comes in.
Robo-advisors are digital financial advisers that use modern technology to offer low-cost investment management services. In this guide, we explain how these platforms work and how can you compare their services.
What is a robo-advisor?
A robo-advisor is an online platform or app that provides the same services as a traditional financial adviser. Using a mix of algorithms and analysis from experts working behind the scenes, these digital advisers create financial plans for customers and automatically manages their investments.
The robo-advice platform generates a recommended portfolio, which is usually a combination of exchange traded funds (ETFs), unit trusts (UTs), bonds/sukuk, gold or other financial instruments. The investment portfolio you receive is based on your financial goals, investment timeframe and appetite for risk.
Once your money is invested, the robo-advisor manages your portfolio and re-balances it whenever necessary to ensure it remains in line with your risk tolerance levels.
What are the benefits of using a robo-advisor?
At about one-tenth of the cost, robo-advisors are much cheaper than having a traditional financial adviser actively manage your investments. This makes financial advice accessible for all Malaysians.
The other advantage of using a robo-advisor instead of making decisions yourself is that it removes the emotion from investing that can often lead you to make the wrong decisions.
However, for the 80% of the population who either cannot afford or are unwilling to pay the fees to receive traditional financial advice, robo-advisors offer a convenient and affordable alternative.
Robo-advisors in Malaysia
While the first regulated robo-advice platform in Malaysia just launched in 2018, robo-advisors tend to become mainstream as the popularity grows at a rapid pace. Today you as an investor have a number of low-cost options to choose from.
Here are some of the most popular robo-advisors in Malaysia, including their minimum investment amount, fees and investment focus:
|Platform||Minimum investment||Annual management fee||Investment focus|
|StashAway||RM0||0.2% to 0.8%||Diversified global ETFs listed in the US Market|
|MYTHEO||RM100||0.5% to 1%||Diversified global ETFs listed in the US Market|
|BEST Invest||RM10||0.5% to 1.8%||Diversified shariah-compliant ETFs, UTs|
|Wahed Invest||RM100||0.39% to 0.79%||Shariah-compliant US and local stocks, Islamic bonds/sukuk, gold|
|Raiz Invest||RM5||RM1.5 a month (under RM6,000) or 0.3% a year (RM6,000+)||Amanah Saham Nasional Berhad (ASNB) UTs, bonds|
|Akru||RM0||0.2% to 0.7%||Diversified global ETFs, UTs|
*Note: Information provided is accurate as of 30 December 2021.
How do I sign up to a robo-advice service?
Although the exact signup process differs between robo-advisors, you will generally need to follow these steps:
- Provide your name, contact details and proof of identity.
- Complete a questionnaire regarding your investment timeframe and your tolerance for withstanding market fluctuations.
- The robo-advisor generates a recommended investment portfolio.
- If you’re happy with the investment portfolio, you can opt to proceed with the recommended strategy.
- Provide your bank account details to fund the investment.
- The robo-advisor invests your money in the chosen portfolio.
- The robo-advisor monitors your portfolio and makes adjustments when necessary to make sure it satisfies your tolerance for risk.
Robo-advice is changing the face of wealth management around the world and could offer a more affordable way for you to look after your investments. However, make sure you compare the benefits and features of a number of robo-advisors before choosing the right service for you.
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