“What the heck is robo-intelligence,” I thought to myself when I first heard about Bank Islam Malaysia Berhad (BIMB)’s new fintech product, BEST Invest, “is it the same as robo-advisory?”
“Robo-intelligence is not robo-advisory,” said Amirul Safuan, Head of Marketing & Digital Business Unit at BIMB Investment Management Berhad, in a cheerful yet repetitious tone that implies he had to answer that question hundreds of times.
“It is the use of big data technology, analytics, algorithms to assist on systematic processes of a large quantity of information and data in the decision-making process. It is about the “process”, not “advisory”.
He answered this during an online press event in May 2020, shortly after the app’s official launch. I was pleasantly surprised to be invited, happy that he took (and answered) all my questions, and then went ahead to hire me to write a user review, even after knowing my (transparency-first) writing style.
To be honest, I am a fan of the keywords BEST Invest are using. Fintech. Big data. Artificial Intelligence. ESG (Environmental, Social and Governance) aka Sustainable Investing. Top it off with Shariah compliance. Awesome, awesome, awesome. The only keywords missing are blockchain and cryptocurrency (jk jk).
And so, it is my utmost pleasure to test out the BEST Invest app, and present to you a list of its pros and cons.
Pros of BEST Invest App
#1 – Delivers on initial promises
Everything in this image is true:
You can start with RM10 deposit. Usually with unit trust products, the minimum initial deposit is RM100 or RM1000, depending on the fund you want to get. I know one fund which requires RM100,000 (!!!) minimum initial deposit.
There is zero sales charge. I can say that BEST Invest is probably one of the cheapest places to get unit trust products.
This is nuts considering FundSupermart (now rebranded to FSMOne) used to be *the* place to get cheap unit trust, as traditional unit trust providers typically impose something like 5% in sales charges PLUS other fees.
It is simple and easy. Digital natives shouldn’t have any problem with the account opening and onboarding processes. Personally I am impressed with the UI/UX, I thought whoever designed it did a good job. I have no complaints, but the Youtuber TheHaikal did point out that the font is a bit small but I’m guessing the target audience is also on the younger side.
Intelligent Robo and Sustainable Investing. ‘Robo-intelligence’ isn’t a regularly-used term, but sustainable investing is. In case you didn’t know, you can’t simply use the term ‘ESG (Environmental, Social and Governance) investing’ for fun. You have to get certified and accredited for that. That costs money, but also draws ever-growing values-conscious investors. Like me. Hashtag virtue-signalling.
(And the fact that many studies say ESG funds correlate positively with higher return on investment makes me like these types of funds even more $_$)
Above: Screenshot taken from From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance report
Backed by an Islamic Financial Institution. BEST Invest is a product by BIMB Investment Management Berhad, which is a fully-owned subsidiary of Bank Islam Malaysia Berhad.
No lock-in period. I am generally super supportive of financial products that are liquid and easy to access. (However, take note. The FAQ said that withdrawal ie selling of funds can take up to 10 calendar days.)
Shariah-Compliant product (yay <3) as well as regulated by Securities Commission Malaysia.
#2 – Good investing journey – clear process with areas for flexibility
A few things stood out as I started investing in BEST Invest. The step-by-step process is really clear. You can really feel like you’re going down a funnel, as the system figures out what’s best for you. Let me share how my journey was like.
First, you have to answer the Great Investment Risk Profile Quiz. Answer 10 or so questions, and the system will tell you your risk appetite. I got aggressive growth-oriented.
Then, you can pick between two options: Do It For Me (use robo-intelligence) or Do It Yourself. I wanted to try the robo-intelligence feature so I picked that.
After you pick your option, you can pick your goal (I chose Hajj/Umrah*), target amount (RM15,000 should be enough right) and target date (I’ll be 42).
*Other goals: Retirement, Travel, Car, Marriage, Children, etc. You can even decide and write your own goal. You can also set multiple goals.
With a target and goal in mind, it will then ask you if you’d like to invest monthly or one lump sum. I picked the former. Somehow, my monthly contribution amount is the nice round figure of RM100 per month (how’d that happen?)
Now, the fun part. At this stage, the robo-intelligence system recommended a mix of 3 funds. I didn’t expect that, I thought it was only going to give me one type of fund, so that was cool.
According to the recommendation, my RM100 contribution will be divided into the following funds every month:
- RM30 or 30% going to BIMB-Arabesque Asia Pacific Shariah-ESG Equity Fund
- RM60 or 60% going to BIMB-Arabesque Global Dividend Fund 1
- RM10 or 10% going to BIMB ESG Sukuk Fund Class A
Interestingly, you don’t have to accept the recommendation. You can change the weight (percentage) or delete it altogether and select other funds.
… Which is exactly what I ended up doing. I looked through what’s in each fund, then changed to these funds and ratios instead:
- RM40 or 40% going to BIMB-Arabesque Asia Pacific Shariah-ESG Equity Fund (increased 10%)
- RM20 or 20% going to BIMB Dana Al-Fakhim – 20% (new fund NOT suggested by BEST Invest)
- RM40 or 40% going to BIMB-Arabesque Asia Pacific Shariah-ESG Equity Fund (new fund NOT suggested by BEST Invest)
THIS IS NOT INVESTMENT ADVICE. PICKING WHAT THE APP SUGGESTED IS PERFECTLY FINE. I completely ignored the app’s warning sign.
All I can say is, two of the funds (which was NOT recommended to me) looked real attractive. I like the idea of investing in money markets with the following holdings,
And I like the idea of investing in ESG companies from Asia Pacific specifically, since I have other investments that cover global markets. Diversifying and all, you know?
(Again, not a recommendation. Follow the system’s recommendations if you’re new in investing.)
So after I picked my funds and happy with everything, I set up the monthly automatic deductions.
Btw – I love this feature! Big fan of automating investment!
And with that, I am done. All I have to do is regularly review it, maybe once every quarter or 6 months or so, but otherwise the automatic deductions and time will do its work for me.
Those are parts which I liked. The cons? Nothing is perfect, and you’ll find out soon enough anyway so might as well I tell you.
Cons of BEST Invest App
#1 – Fees are low for unit trust standards, but not as low as ETF
Have to put it out there, since you’ll ask about fees anyway (and you should). Even though getting unit trust via BEST Invest can be considered revolutionary and cheaper than traditional unit trust, they still can’t beat rates by ETF.
HOWEVER, and as mentioned above, BEST Invest beats Fundsupermart/ FSMOne’s rates, hands down. 2% or so sales charge PLUS management fees PLUS other fees are still very common there.
Note: Even though unit trust and ETF are structurally different financial instruments, I’m comparing them both because they’re used for similar purposes: typically (but not always) included in a diversified, long-term investment portfolio
#2 – Only 5 funds to choose from
I understand the whole robo-intelligence system is to help investors to pick suitable funds.
But also, there are only… 5 funds… to choose from.
(Also it goes without saying that all funds are products from BIMB Investment only)
Yes, I understand that the mix-and-matching of funds and ratios is probably part of the robo-intelligence system at work. And I don’t know if BEST Invest plans to add on more funds to the mix.
But for now at least, it’s still just 5 funds. As opposed to tens (or hundreds) of funds.
Conclusion of My BEST Invest Review
Even I can see that my cons are nitpicky at best. Overall, the pros far outweigh the cons.
In terms of ‘legitimacy’ as a fintech product, no issues there. Bank Islam is a reputable bank. A few years back, Islamic fintech products like this were almost non-existent, and you had to be really intentional about choosing Shariah-compliant products.
Now the easy option is there. Not only I get Syariah-compliant funds, they’re ESG aka Sustainable Investing too. Almost too perfect. It justifies the fees.
In any case, I admit I’m a new user, so I’ll report back in a couple of months after using BEST Invest app for a bit more. Stay tuned. EDIT: so far, so good.
Existing users of BEST Invest app, seeking your comments and feedback. How are you finding it? Let me know in the comments section!
For everyone else who is curious, feel free to try it out. Scan the code below to download the app.