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What is Robo-advisor and Which One Suits You

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Ever since ChatGPT was released, everyone starts talking about AI now.

But do you know that there are investments that are managed by AI?

It is called a robo-advisor.

It replaces unit trust manager with AI, hence lower fees & suitable for beginners.

Let us talk more about robo-advisors and which one suits your taste.

What is Robo-advisor

By definition, a robo-advisor is an investment platform that automates our investment portfolio using AI algorithms. It will suggest an investment portfolio based on our risk tolerance and investing goal while rebalancing our portfolio periodically.

Robo-advisors will have a set of pre-defined portfolios with different risks and returns. Each caters to different levels of risk tolerance.

Advantages of investing with a robo-advisor:

  • Low fees
  • Less human bias
  • Low capital to start

Most robo-advisors invest in ETFs (Exchange Traded Funds) with different assets like stocks, bonds, or even gold. This means they provide well-diversified investments for us, suitable for most beginners.

By investing in robo-advisors, there will be some management fees incurred. But compared with unit trusts, robo-advisors charged only 1% or lower for their annual fees, instead of 1.5% or more.

Is Robo-advisor Safe to Invest

Even though the investments are managed by AI, the business behind the platforms is still managed by humans.

On top of that, most robo-advisors platforms are regulated by the Security Commission of Malaysia. For instance, StashAway’s license and Wahed’s license.

Speaking of SC Malaysia, we should always check if the investment we’re interested in is regulated by SC Malaysia. If it is not, at least it needs to be regulated by other countries’ securities commissions, such as US SEC, UK FCA, or Singapore’s MAS.

Otherwise, investing in unregulated investments may have a high risk of getting scammed.

List of Robo-advisors in Malaysia

Here are the reputable robo-advisors that you can use:

Reference: imoney

*Technically, BEST Invest is a Robo-intelligence platform. It is included as it is similar to a robo-advisor.

Robo-advisor with the Highest Return

Woah wait!

If you think investing is as simple as throwing all your money into the highest return investment, you’re in deep trouble.

Unlike fixed deposits, the returns of stock investments are not fixed. You might see a 20% return this year, but there’s no guarantee that you will get the same return next year. If you’re unlucky, you may lose 20% or more of your investment value.

Please remember that there are ups and downs in stock investments. This also means investments with high returns are usually (not all) high risks.

So I will not help you to do research on which one has the highest return. You’re on your own for this one. (A good excuse for me to save my time and effort haha!)

Invest Based on Your Risk Tolerance

One thing I like about robo-advisors is they will provide questionnaires for us to evaluate our risk tolerance. From our answers, they will suggest a portfolio that suits our risk tolerance.

If you just started stock investing, I strongly recommend you complete the questionnaire with honest answers. If you are a risk-averse person, the robo-advisor will suggest a conservative portfolio for you.

Alternately, if you have experience in investing and don’t mind taking risks, you will get suggested with an aggressive portfolio with high return (and high risk).

Which Robo-advisor Suits You

Here are my suggestions based on the criteria you may think of:

  • For Shariah-compliant investments, choose Wahed Invest or BEST Invest
  • For US investments, choose Akru, KDI Invest, StashAway, or Wahed Invest
  • For global/diversified investments, choose MyTHEO or StashAway
  • For MY investments, choose Raiz, Wahed Invest, or BEST Invests
  • For S&P500, choose Akru or StashAway
  • For a 0% fee (for the first RM3k), choose KDI Invest
  • For the top 3 low fees, choose Akru, KDI Invest, or Raiz
  • For RM1 min capital, choose Akru, KDI Invest, or StashAway

You don’t have to choose only one. You may try multiple of them for at least 1 year, then decide which one or two you want to continue investing.

It is good to explore different investments when you just started investing.

Read More: How to Start Investing in Stocks with RM100

In Summary

Robo-advisor is not only a good tool for beginners to start investing, but it is also a great tool for experienced investors to automate their investments.

Some say they rather use brokerage accounts to avoid robo-advisors’ annual fees. For me, it is worth paying this small fee for convenience, especially when you just started investing. Moreover, they’re a lot cheaper than unit trusts’ management fees.

Personally, I am using StashAway for my kid’s education funds and Wahed Invest for my fun experiment. Both of them are giving positive returns (>10%) as of now.

That’s all for this week, my friend!

Talk with you again next week.

Your Money Buddy,


Whenever you’re ready, there are 2 ways I can help you:

1) Book a 1-to-1 Call Session with me to pick my brain, whether it is about investing, money management, or any topic you’re interested to learn

2) If you’re not sure which platform to invest your money, here are 3 platforms that I personally use:

Rakuten Trade – Where I invest in US index fund ETFs. Get RM30 worth of RT points if you register & unlock foreign trading with my referral link.

Wahed Invest – Where I invest in Shariah-compliant US ETF. Get free RM10 if you register a new account with my referral code “markeo1

Versa – Where I invest my emergency fund for a 4.3% return (up to RM30k). Get free RM10 if you register a new account with my referral code “AL9JZJ9H

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