With MoneyOwl's shock closure, what should customers do?

What happened?

MoneyOwl announced that it will be winding down its financial advisory business and all commercial activities will end by 31 December 2023. 

This may come to be a surprise to many, as MoneyOwl is one of only two robo-advisors able to offer investment services for the CPF Investment Scheme.

In the announcement, it was shared that the decision was made after a joint review led to the conclusion that MoneyOwl would not be commercially viable.

If you are wondering what you should do a customer of MoneyOwl, and how this may impact other robo-advisors in Singapore, read on to find out. 

What is MoneyOwl?

Launched as a joint venture between NTUC Enterprise and Providend in 2018, MoneyOwl offered an integrated suite of financial solutions across multiple domains such as investment, insurance, and will-writing.

It aimed to streamline the financial planning process for its clients by combining a digital platform with personalised financial advice. 

In an October 2021 interview with The Business Times, MoneyOwl's CEO Chuin Ting Weber shared about the company's mission to provide “comprehensive, competent, and conflict-free” financial planning advice to ordinary working families in Singapore.

In April 2022, MoneyOwl began offering a low-cost digital Central Provident Fund (CPF) investing service that allows Singaporeans to utilise funds from their CPF Ordinary Account (OA) and Supplementary Retirement Scheme (SRS) account.

MoneyOwl was licensed by the Monetary Authority of Singapore (MAS), holding dual licenses as both a financial adviser and fund management company.

They were 60 percent owned by NTUC Enterprise and 40 percent by Providend Holding. But last year, Providend divested from MoneyOwl. 

What will happen to clients after the closure of MoneyOwl?

MoneyOwl will transfer its investment and insurance business to iFast, which will reach out to MoneyOwl clients from September 2023. 

Hence, if you had put your money into the WiseSaver, or WiseIncome, the account will be transferred to iFast. 

Investment clients may transact on MoneyOwl’s portal until 24 October 2023. Thereafter, they can do so on iFast’s portal from 25 October 2023. 

As iFAST is the existing custodian of MoneyOwl clients’ investment accounts, all MoneyOwl clients can get digital access to their portfolios via the iFAST platform at the same level of fees. They can also access to iFAST’s team of more than 60 advisers for both investments and insurance.

MoneyOwl will also stop accepting new insurance applications from 8 September 2023. 

All MoneyOwl online services and account logins will be disabled after 15 December 2023, 

For other frequently asked questions, you can find out more on the MoneyOwl site here. 

Apart from MoneyOwl, what are the other robo advisors in Singapore? 

Apart from MoneyOwl, the other popular digital wealth platforms or robo-advisors in Singapore are Endowus, StashAway, Syfe and DBS digiPortfolio. 

For a comparison, here’s a table that summarises some key information:

What should we consider when choosing a robo-advisor?

#1 Operational track record

We would be looking for a robo-advisor’s track record over time to determine if it is credible.

Firstly, having a strong financial backing might also offer customers with more confidence about the long-term viability of the platform. In this aspect, DBS digiPortfolio stands out with the backing of DBS Bank, Singapore’s leading consumer bank which recently reported a record quarterly profit. 

Next, we can also look at is how long the robo-advisor has been around. StashAway is the oldest robo-advisor and has been around since 2016. However, the others came onto the scene very shortly thereafter between 2017 and 2019. 

Another important aspect of a robo-advisor’s track record would be their assets under management (AUM)—a higher AUM typically signifies that the robo-advisor may have gained the trust of a larger client base.

Recently, Endowus announced that its asset under management crossed US$5 billion (S$6.75 billion) together with its US$35 million fundraise.

#2 Security and safety of platform

Another consideration is whether the robo-advisor platform is licensed by the Monetary Authority of Singapore.

Endowus, StashAway, Syfe and DBS DigiPortfolio are operated by entities which hold a Capital Markets Services (CMS) license.

All of them also hold client money with custodian accounts. For example, Endowus has custody accounts with UOB Kay Hian that processes all the users’ transactions.

#3 Products offered

When it comes to product offerings, all the platforms above offer a robo-advisor product that allows your investing portfolio to be automated based on your individual investment objectives and risk appetite. 

Endowus, StashAway and Syfe also offer cash management accounts to make your idle cash work for you. Read our guide to choosing the best cash management account if you’re looking to leverage these platforms to earn a higher yield on your cash. 

Endowus, StashAway and Syfe recently launched services targeted at accredited investors, allowing them to invest in products such as private equity and private credit funds. 

Amongst the various platforms, Syfe is the only one which offers trading of individual stocks and ETFs through Syfe Trade.

#4 CPF investing

Following the closure of MoneyOwl, only Endowus allows users to invest their CPF OA and SRS funds on the platform.

You will not be able to invest your CPF OA funds through StashAway, Syfe and DBS DigiPortfolio.

However, you are still able to invest your SRS funds through StashAway.  

#5 Fees

While seemingly small, variations in management fees can accumulate over a long-term period, especially for investors who commit to a robo-advisor for at least a decade or more.

When it comes to lowest fees for the robo-advisor portfolios, Endowus and Syfe have lower fees compared to StashAway and DBS DigiPortfolio.

Endowus charges a 0.60% annual management fee which is lower than Syfe’s 0.65% annual management fee.

Endowus’ annual management fee for CPF/SRS funds is even lower at 0.40%. 

It might also be worthwhile checking the fee structure to see which robo-advisor has the lowest fees for the amount you are looking to invest. 

For example, Syfe’s annual management fee drops to 0.50% for asset under management (AUM) of S$20,000 and above, while Endowus’ annual fees falls to 0.50% for assets under management of S$200,000 and aboe.

Stashaway has the highest annual management fees starting from 0.8% per annum for users with an AUM below S$25,000.

The management fees are lower for the cash management products. For example, StashAway has a management fee of 0.15% and 0.2% per annum for StashAway Simple and StashAway Simple™ Plus respectively. 

What happen­s when a robo-advisor shuts down?

Robo-advisors have shut down in the past. For example, Smartly closed operations in 2020.

When you deposit your money into the robo-advisor account, your funds are held in custody with a bank and kept separate from the robo-advisor’s own accounts.

As long as your assets are held in a separate custody account under your own name, you will still have access and claim to them even if the platform shuts down.

Is my money invested in a robo-advisor protected by SDIC?

Unfortunately, your money invested in a robo-advisor platform is not insured by the SDIC. 

This is because the deposit insurance only covers provides protection for deposits in Singapore dollars for standard savings, current, or fixed deposit accounts,

You can learn more about deposit insurance here. 

What would Beansprout do?

It is important to choose the right platform to give us a peace of mind when investing. 

When deciding on a robo-advisor, we would consider the platform’s operational and safety track record, range of products offered and fees. 

While the closure of MoneyOwl would mean there are less available platforms for us to choose from, the good news is that the existing platforms are still rolling out new products to cater to different user segments. 

For investors who are looking at investing using their CPF OA funds, read our review of Endowus here.

For investors who are looking to earn a higher yield on your savings, read our guide to choosing the choosing the best cash management account here.