We don't know the endgame /exit strategy of many of these robos and the capital that is backing them -
* Are they actually angling to be bought out by one of the big boys (banks or insurers?);
* Are they going for IPO? (very hard in SG context)
Or do they have a plan to remain in SG market as an independent entity for the long term?
It's really unclear, but in terms of longevity, I am hoping there is some difference between those taking VC funds and those which are bootstrapping in some way -- the VC-funded ones are always gonna be expanding very rapidly and aggressively to try to meet their growth targets for the next funding round, while the bootstrapped ones could possibly run a bit leaner and grow slow and steadily.
Why would this be an issue when so many other robos use ETFs?
I think the ones that are doing fractional ETFs, like StashAway, have a CMS license and 'touch' your money/assets? I believe that means as far as their custodian is concerned, the roboadvisor owns the shares (and any fractional bits leftover) in an omnibus account and the roboadvisor is responsible for recording which customer has which fractions. There's also a fair bit of operational complexity for the roboadvisor. At some point you have to trust someone, but a lot of folks don't like this at all, even if it
can lead to lower costs (netting off trades, aggregating trades across customers within the day, aggregating across days).
Meanwhile Endowus talks up their whole "double ledger" trust account setup with UOBKH a lot, as a 'safety' and no-ambiguity-about-ownership thing where Endowus is supposed to be not in the chain at all. That probably means they can't or won't take the other fractions of your shares. Operationally this might be easier for them, as it amounts to them issuing instructions of "buy $x worth of this fund for this customer", and their bookkeeping is less complex and can always be reconciled against UOBKH as source of truth. So unless UOBKH as custodian is able and willing to deal with the complexity of offering fractional ETF shares, seems like it won't be so trivial for them to add that in their existing setup.
Not all of the other roboadvisors using ETFs offer fractional shares anyway -- I think Syfe does, but Autowealth and Kristal don't, for example.
From what I researched before, Endowus has S$100m AUM, AutoWealth has S$30M AUM. This info is a few months old. Stashaway is secretive about their AUM..
I think Kristal.AI has stated something like above USD 130mil.
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Separately, I ran across this long interview transcript a couple months ago where they have this whole story about how Endowus got this S&P 500 bit down to 0.40% for CPFIS-OA. Perhaps given the constraint of SGD-denominated funds, that's the lowest cost available? I guess they generally offer reasonably priced options for CPF-OA and perhaps also SRS (I'm not too familiar with the options for that), and the objections should be limited to the cash investments. But comparing roboadvisors against DIY is always gonna be contentious, if we don't agree that roboadvisors do provide some services or benefits in exchange for their fees.
https://www.thegoodinvestors.sg/endowuss-fight-to-give-a-better-retirement-for-singaporeans/ (search for "Endowus’s efforts to lower costs for investors" section if you don't want to read it all, it's probably about 30-40 min)
