Robo Advisor in Malaysia

Best Robo Advisor in Malaysia: Lowest Fees, Syariah-Compliant, Global Exposure and More

Robo advisors, or its technical term, Digital Investment Managers (DIMs) as per the Securities Commission fall under the umbrella of wealthtech services.

The ‘tech’ part is important – unlike a traditional portfolio manager, robo advisors have streamlined/automated various labour-intensive/mafan parts of investing: the risk profiling, suitability assessment, asset allocation and rebalancing processes. Spare a thought for all the portfolio managers and sales agents who have lost their jobs because robots took over

I love robo advisors so much. I think they are EXCELLENT for investors, including and especially for newbie investors. The entry barrier is ridiculously low: all you need to do is to open an account, upload your identification documents, add funds into the portfolio recommended for you (guided process), and just continue to add funds until you reach your goal(s).

But, which robo advisor to pick? What is available for Malaysians? This is where I come in 🙂 I’ve done the research and I’d love to share my findings with you.

The structure of this guide is:

  • The ‘Fruits Basket’ Analogy (Investing beginners please read this)
  • The 7 Robo advisors in Malaysia (plus BEST Invest)
  • Best Robo advisor in Malaysia: Lowest Fees
  • Best Robo advisor in Malaysia: Global Exposure
  • Best Robo advisor in Malaysia: Sustainable Investing 
  • Best Robo advisor in Malaysia: Syariah Compliant 
  • Best Robo advisor in Malaysia: Community
  • Best Robo advisor in Malaysia: Malaysia boleh!

Disclaimer: I am not a licensed financial planner and this should not be taken as financial advice. Use this guide to learn, but cross-check with other platforms/parties.

Explaining Robo Advisor Using The ‘Fruits Basket’ Analogy

Using a robo advisor for investing is similar to buying a fruits basket. You are buying a product which includes a variety of components.

The fruits basket from one robo advisor is not the same as the fruit basket offered at another robo advisor. In fact, the fruits baskets that two people might buy from the same robo advisor might be different too, as we may have different preferences/risk appetites/ financial goals in mind.

What exactly are you buying/investing in? Depends on the fruits basket. Imagine each fruit as a type of asset:

  • shares (in different markets/regions/ industries/themes), 
  • bonds/ sukuk, 
  • properties/ real estate/ REITs, 
  • cash/currencies, 
  • precious metals (gold etc) 
  • And more

A robo advisor might recommend you a fruits basket containing only bonds and cash, as you informed them (through questionnaires) that you are a super conservative investor. The same one might recommend another investor with high risk appetite a fruits basket containing high-growth stocks/index fund in various emerging markets.

What people tend to forget is you can buy a few fruits baskets, for different scenarios. Maybe one is for retirement. Another one earmarked for property ownership. Another one for marriage fund. You don’t have to pick just one.

Now let’s go on to the robo advisors available in Malaysia.

The 7 Robo Advisors in Malaysia (Plus BEST Invest)

As of March 2021, there are 7 licensed Robo Advisors aka Digital Investment Managers in Malaysia: 

  1. Akru Now Sdn. Bhd. – The home-grown Malaysian one
  2. BH Global Fintech Solutions Sdn. Bhd. – An ‘independent investment advisory and research house’. No info about robo advisor on the website; you can skip this one
  3. GAX MD Sdn. Bhd. – Mytheo; Malaysian partner of Theo from Japan
  4. Raiz Malaysia SdnBhd – Raiz Invest, the invest-your-spare-change platform. JV between PNB (aka ASNB) and Raiz Invest Australia
  5. StashAway Malaysia Sdn. Bhd. – Stashaway; expanded from Singapore
  6. UOB Asset Management (Malaysia) Berhad – UOBAM Invest; ‘robo-advisory for business’. Skip this if you’re managing own funds
  7. Wahed Technologies Sdn. Bhd. – Wahed Invest; expanded from New York

Soon, more robo advisors will be available to Malaysians. I am especially excited for Kenanga Investment Bank’s robo-advisory platform as they bought a stake in Tokenize, the digital asset exchange for buying/selling cryptocurrencies. Will they start offering/including cryptocurrencies in their portfolio??? Only time will tell 🙂

So, which is the best robo advisor for Malaysians? That’s what this article is for. In addition to the 7 robo advisors, I will also include BEST Invest. It is NOT a roboadvisory platform but might as well be, as they use ‘robo-intelligence’ and impose similarly low fees with 0% sales charge for their unit trusts.

(Those who buy unit trust will know how rare 0% sales charge is. It can go up to 6%, not including the other fees that you have to pay.)

Best Roboadvisor in Malaysia: Lowest Fees

The fees are similar; all below 2% per annum. That figure is combined from each robo advisor’s:

  1. Annual fees – ranges between 0.2-1% (this is the one listed on their main page), AND/OR
  2. Annual fund expense – ranges between 0.04-1.8% (this one you have to dig a bit in their FAQs/T&Cs; varies depending on the fund you’re investing in)

Generally speaking, the more funds you deposit in a platform, the less you pay in fees, percentage-wise. However, my view is unless you have six-figures or seven-figures, it doesn’t make sense for you to choose a robo advisor solely based on fees as other factors are more important.

Additional note: It also does not make sense to invest in Raiz Invest if you have small amounts of funds in there, as they charge a flat RM1.50 per month for accounts under RM6,000. Imagine if you have RM10 in there and they take out RM1.50 – that’s 15% in fees!

You can see comparison of robo advisors fees in this iMoney article and at each platforms’ website. But, again, fees aren’t the most important factor.

Best Roboadvisory in Malaysia: Global Exposure

Winner: Mytheo (most diverse)

Also good: BEST Invest, Stashaway, AkruNow (US, China, Emerging markets)

If you are looking for global exposure (which you should if your current investments are all Malaysia-focused), then Mytheo has the most diverse option – look at the ETFs they offer globally. Mytheo will recommend a variety of those ETFs in your investment portfolio based on your answers (a simple quiz, 5 questions).

Here’s how a sample portfolio might look like:

Meanwhile, Wahed Invest exposes you to US (and MY) market, and Raiz Invest is mostly invested in Malaysian companies.

Best Roboadvisor in Malaysia: Ethical Investing 

Winner: BEST Invest (all ESG funds)

Also good: Stashaway (score: 3.21-3.57 out of 5), Wahed Invest (no gambling/ alcohol/ firearms etc companies)

Personally, ethical/ESG investing is one of my top criteria in choosing a robo advisor. There are research that links ethical investing to higher profits, too = the perfect two birds one stone situation for me.

Here’s how a sample portfolio might look like:

best invest bimb review

Related: [VIDEO] A Conversation on Socially Responsible Investing feat. Najmuddin Mohd Lutfi, CEO of BIMB Investment

Best Roboadvisor in Malaysia: Syariah Compliant 

Winners: Wahed Invest, BEST Invest (tie – both Syariah compliant)

Also good: Raiz Invest (TECHNICALLY not syariah-compliant, but they received ‘permissible’ aka harus status) (note: referral link: you get RM10)

Wahed Invest offers 7 portfolios (fruits baskets), from Very Conservative to Very Aggressive. Moderately Conservative portfolio and above includes the Wahed FTSE USA Shariah ETF, which includes these big companies.

Best Roboadvisor in Malaysia: Community-focused

Winner: Stashaway

Also good: the rest

Stashaway’s focus on their users and community is unmatched. Their UI/UX is one of the best. Stashaway team is ahead of the rest in terms of community involvement and management, and high-quality content marketing. I frequently see them participate in educational talks, and they publish amazing articles.

It is unfortunate that Stashaway is not Syariah-compliant or I would totally opt for this one as my main account – from what I can see from sharing from others, the returns aren’t bad either.

Articles by Freddy Lim, Co-founder and CIO (Chief Investment Officer) of Stashaway offers great insight into the fund management industry. In particular, I enjoyed this article explaining their trademarked ERAA strategy, which is they say is better than the Nobel Prize-winning Modern Portfolio Strategy (a strategy used by some robo advisors in this list).

Best Robo advisor in Malaysia: Malaysia boleh!

Winners: Akrunow and Raiz Invest

Also good: Wahed Invest

Because #sapotlokal. Akrunow is a home-grown startup, while Raiz Invest invests in ASNB funds, which includes a lot of blue-chip companies listed in the Malaysian stock exchange.

Wahed Invest invests in Malaysia-made ETF in Moderately Conservative portfolio and above.

Lastly – Best Robo advisor by ROI?

Maybe by this point, you’re like, Suraya can tell me which robo advisor can give the most profit, the most return on investment?

I can’t, because I don’t know your risk appetite. It doesn’t matter if you happen to pick the most high-profit one – if you selected one that is not suitable for your temperament, all you’re going to do is panic sell during bad market conditions. Don’t say ‘Oh I won’t one’ – you will. Unless you’re a psychopath who doesn’t experience emotions, chances are you will.

So, go back to the above categories and select a couple of robo advisors based on the criteria that means the most to you. Check the websites, do the research. If you have a few hundred ringgit or more, it’s not a bad idea to try a few, just to compare between platforms. If you end up liking one over the other, you can always withdraw and allocate everything in one place. None of them charge withdrawal fees.

With that, I’ll end this guide here. What questions do you have about robo advisors in Malaysia? Which one(s) are you using now, and how are you liking it? I invite you to share your experience investing through robo advisors in the comments section so the rest of us can learn 🙂

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