Take a look at the local fintech scene and you will find that the popularity and number of robo consultants in the market has increased.
They are best described as wealth management platforms that automate the process of investing money on behalf of the user through algorithms without the need for human monitoring.
Typically, a robotic advisor first collects information from users about their financial condition and future goals, and then uses that data to determine which investment portfolio is best for the user.
Many like to use robo advisors because, among other things, they offer easy account setup, portfolio management and low fees.
These functions also enable financial inclusion because the use of robo consultants does not require extensive knowledge of investments.
No matter whether you want to start your first investment portfolio with the help of a robo consultant or are simply looking for further options, we would like to introduce the 4 licensed players that we have in Malaysia.
MYTHEO is a Malaysian-Japanese joint venture whose story in Japan begins with a fintech company called Money Design.
In 2016 Money Design launched the first robo consultant (THEO) in Japan under the regulation of the Japan Financial Services Agency.
Together with the Silverlake Group, a software organization with over 30 years of experience in the financial sector in Malaysia and throughout Asia, Money Design founded GAX MD.
GAX MD is the joint venture that was developed to tailor THEO for Malaysians, hence the name MYTHEO.
Track record: THEO has helped over 75,000 Japanese investors and has managed total assets of more than $ 450 million since 2016.
In Malaysia, MYTHEO was licensed by the Securities Commission (SC) in 2019 and has not released any major issues to date.
Begin: With MYTHEO, you can invest in capital with a minimum of 100 RM, and each subsequent top-up can be as low as 100 RM.
Withdrawal fees: You can withdraw any amount from your MYTHEO account at any time without paying any fees.
Portfolio exchange fees: The first 6 counters in a calendar year are free of charge. Subsequent switches in the same calendar year cost $ 2.50 per switch.
Annual administration fee: MYTHEO has staggered exchange rates per year based on your investment amount in MYR (based on the indicative US $ 4.00 exchange rate):
- First RM 30,000, it's 1%,
- The next 30,000 to 100,000 RM is 0.9%.
- The next 100,000 to 300,000 RM is 0.8%.
- The next 300,000 to 500,000 RM is 0.7%.
- With RM500,000 to RM1,000,000 it is 0.6%.
- Over RM1,000,000 it is 0.5%.
There are no trading fees, exchange fees, redemption fees or surprise fees.
2nd Raiz Invest (Raiz)
Launched in Australia in 2016, Raiz is a micro-investing robo-advisor that uses users' small change to round off everyday shopping with a Maybank debit card.
Aside from this aggregate investment model, users can also invest with flat rate and recurring investments.
It was developed as a joint venture between the subsidiary Jewel Digital Ventures by Permodalan Nasional Berhad (PNB) and Raiz Invest Australia and received the license to operate here in 2020.
Track record: Since its launch in Australia in 2016, Raiz has collected more than 1.15 million downloads and 791,000 registrations.
It has more than 211,000 active monthly users and managed funds of over AU $ 444 million as of December 31, 2019.
No major user issues have been released so far.
Begin: With Raiz, users can invest from RM5.
Withdrawal fees: You can withdraw any amount from your Raiz account at any time without paying any fees or penalties.
Portfolio exchange fees: None.
Annual administration fee: Raiz charges two types of fees:
- A monthly account fee of RM 1.50 if your Raiz investment account is less than RM 6,000 at the end of each month.
- An annual fee of 0.3% (calculated monthly, calculated daily) if your Raiz investment account is worth RM 6,000 or more at the end of the month.
There is no charge for accounts with RM0 balance.
StashAway started in Singapore in 2016 and soon entered Malaysia in late 2018.
It was the first company in Malaysia to receive a capital market services license and to perform fund management activities under the Digital Investment License Framework.
It is licensed from the Monetary Authority of Singapore and received its license from SC in Malaysia in November 2018.
Track record: In 2019, StashAway announced that it had served its first 100,000 customers.
StashAway has had no flaws in its balance sheet since launch until July 27, 2020, when an anomaly from its direct debit service provider in Malaysia, Curlec, left some Malaysian users with bank accounts drained.
The bug caused sequential automated transactions by users who had set up automated monthly payments to StashAway Malaysia, but the team responded quickly and took action.
StashAway Malaysia is currently working on a detailed technical post-mortem analysis to provide transparency to the users concerned and to ensure that this does not happen again.
Despite the disruption, StashAway Malaysia is able to handle such a disruption with care and care.
Begin: No minimum investment is required to get started.
Withdrawal fees: None.
Portfolio exchange fees: None.
Annual administration fee: StashAway offers tiered interest rates per year based on your total investment in MYR:
- The first 50,000 RM is 0.8%.
- The next 50,000 to 100,000 RM is 0.7%.
- The next 100,000 to 250,000 RM is 0.6%.
- With RM250,000 to RM500,000 it is 0.5%.
- The next 500,000 to 1,000,000 RM is 0.4%.
- Any additional amount over RM1,000,000 to RM3,000,000 is 0.3%.
- Any additional amount over RM3,000,000 is 0.2%.
4th Wahed Invest
Wahed Invest is an ethical Islamic (halal) investment platform based in New York. It was founded in 2015, but was only launched in September 2016 after a year of product development and beta tests.
It has an ethics review body that monitors the company's investments to ensure that they are in line with Islamic values. You cannot include the alcohol, firearms, gambling, or tobacco industries, nor can you earn excessive interest.
Wahed Invest launched in Malaysia on October 30, 2019 after receiving its license from SC on October 21, 2019.
Track record: Wahed Invest announced on its Facebook page that it had finally won 100,000 customers worldwide on July 12, 2020.
Due to a brief search on the Internet, there was no news of controversy or problems related to the wealth management platform.
Begin: There is a minimum fee of RM 100 that you would have to invest as capital to start wahed invest.
Withdrawal fees: None.
Portfolio exchange fees: None.
Annual administration fee: Wahed Invest's annual fees are:
- 0.79% of your total investment amount if it is between 100 and 499,999 RM.
- 0.39% of your total investment if it is 500,000 RM or more.
According to his website, there are no trading fees, hidden fees or compensation fees.
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BEST Invest is a platform that is similar to a robo consultant but does not define itself as such.
Instead, it defines itself as a robo-intelligence platform because the use of big data technology, analysis and algorithms is intended for the decision-making process rather than for consulting practices.
BEST Invest was founded in April 2020 by BIMB Investment Management Bhd, a wholly owned subsidiary of Bank Islam Malaysia Bhd.
It is BIMB Investment's first robo-intelligence investment platform that allows users to invest in Shariah ESG-compliant funds.
Dictionary time: Sharia-compliant funds are one of many categories for socially responsible investment. Similar to other socially responsible funds in the Universe for the Environment, Social Affairs and Governance (ESG), the funds examine potential portfolio investments for specific requirements that followers of the Muslim religion want.
Raiz was the youngest robo consultant to enter the Malaysian market. However, the Thailand-based Robowealth Mutual Fund Brokerage Securities, which has also already received its license to operate SC, will be on its heels.
However, no official start date was given for Robowealth. However, there is no doubt that the Malaysian fintech scene is slowly becoming more and more occupied by robo consultants for the benefit of users.
- Read more about what we wrote about fintech here.
Selected image source: freepik