A robo advisor is a low-cost, online investing platform that uses algorithms to create and manage investment portfolios. Robo advisor in Malaysia aims to make investing simple by removing the guess-work in stock and fund picking. Normally you would answer a few questions to determine your risk profile, then you start putting in your money. The robo advisor then does the investing for you, does the rebalancing for you, does the buying and selling for you, and many more.
A robo advisor employs technology to monitor global markets and to react to new investing opportunities. The technology analyses thousands of data points each day, incorporating information from across continents and asset classes, to develop investment portfolios, without the influence of human emotions. These portfolios aim to generate sustainable returns while managing risk.
Benefits Of Robo Advisor
They also do away with the traditional need to lock in funds for a set amount of time. Its user-friendliness is a positive for beginner investors, and would be a good place to learn how investing works and to understand your personal risk profile and appetite, before moving onto more hands-on and advanced investing.
The fees charged are minimal when compared to traditional investment products, and its accessibility and low barrier to entry suggests that it is a viable alternative for individuals that are not financially savvy or have the time to pore over countless annual reports.
Some only requires you to make an initial deposit of RM100, which makes it very accessible by most Malaysians. Then there’s also the convenience of the account opening can be done online, all by just using a smartphone.
Getting Started With Rob0 Advisor In Malaysia
Robo advisors are automated financial advisors. They are an online tool that assists investors in picking an optimal investment portfolio according to their risk tolerance profile. Typically, robo advisors start by asking investors questions to understand their risk appetite and allocate investments based on certain algorithms.
Once investors agree to the investment allocation, they can start funding their account and the robo advisors will purchase the underlying securities and manage their portfolio by rebalancing it periodically. Robo advisors have emerged as favorites to younger demographics due to their low account minimums, low fees, digital-only service and overall, a more efficient and timesaving offering.
8 Licensed Robo Advisor In Malaysia
There are now 8 licensed robo advisor in Malaysia or also known as digital investment managers (DIM) that are recognised by the Securities Commission Malaysia (SC):
- Akru Now Sdn Bhd
- BH Global Fintech Solutions Sdn Bhd
- GAX MD Sdn Bhd
- Raiz Malaysia Sdn Bhd
- StashAway Malaysia Sdn Bhd
- UOB Asset Management (Malaysia) Bhd
- Wahed Technologies Sdn Bhd
- Kenanga Investment Bank Bhd (KIBB)
Each comes with their own product and uniqueness. Robo advisor platforms typically invest in exchange-traded funds (ETFs) which are a compilation of stocks, bonds and other investments. Most robo advisor in Malaysia tend to focus on foreign ETFs.
You can actually start investing in robo advisor with just RM100. It is also a good habit to perform regular savings every month, so you can see your investment in robo advisor growing.
With robo advisor, you can easily diversify your portfolio since it is investing in multiple instruments. Just like the popular saying that goes, “Don’t put all your eggs in one basket”.