Robo Advisor in Malaysia

Which is the Best Robo Advisor in Malaysia? Ultimate Comparison Guide

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Which robo advisor in Malaysia is the best? I hate ‘it depends’, so let’s answer it this way: which of the factors below are the most important to YOU?

  1. Lowest Fees
  2. Global Exposure
  3. Sustainable Investing 
  4. Shariah Compliant 
  5. Best UI/UX
  6. Home-grown
  7. Technology
  8. Fixed deposit alternative
  9. By ROI (return on investment) – which robo advisor has the best returns?

Pick a number, then go on the sections below to see which robo advisor(s) you should use. Disclaimer: Do not take the info in this article as financial advice. Use this guide to learn, but cross-check with other platforms/parties.

But first, if you’re new to the whole concept – what *is* robo advisor? How many are there in Malaysia? How do they invest your money?

Let’s cover all that in..

What are robo advisor services?

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 may lose their jobs because robots took over

Is it good to invest in robo advisors?

I think robo advisors are EXCELLENT for investors, including and especially for newbie investors. The entry barrier is ridiculously low. All you need to do is:

  • open an account (or a few),
  • 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)

How many robo advisors are there in Malaysia?

How many robo advisors are there in Malaysia? As of Mar 2022, there are 8 licensed Robo Advisors aka Digital Investment Managers in Malaysia listed in Securities Commission page: 

  1. Akru Now Sdn. Bhd. – AkruNow; 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
  8. Kenanga Investment Bank Berhad – Kenanga Digital Investing (KDI)

Not technically robo advisor but might as well be: BEST Invest

In addition to the 8 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.)

How your money in Robo Advisor is invested, 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 dissecting which robo advisor is the best, based on different benchmarks.

#1 – 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.

#2 – Best Roboadvisory in Malaysia: Global Exposure

Winner: Mytheo (most diverse)

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

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, Raiz Invest is mostly invested in Malaysian companies.

#3- 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

#4 – Best Roboadvisor in Malaysia: Shariah Compliant 

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

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

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

Note: I have personally used Wahed Invest for over 2 years and happy with it. If you want to open an account and try Wahed Invest yourself, download the Wahed Invest app from Appstore/iOS and use my referral code ‘surbin1’ to get free RM5 bonus

#5 – Best Roboadvisor in Malaysia: UI/UX

Winner: Stashaway

Also good: the rest

It is unfortunate that Stashaway is not Shariah-compliant or I would totally opt for this one as my main account. If Shariah-compliance is not your dealbreaker and you want to try, get reduced fee via my Stashaway referral code Malaysia in this link.

Stashaway’s focus on their users and community is unmatched. Their UI/UX is one of the best (if not 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.

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).

#6 – Best Robo advisor in Malaysia: Home-grown

Winners: Akrunow, Raiz Invest and Kenanga’s Digital Investing

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. Kenanga’s Digital Investing is from Kenanga Investment Bank, the largest independent bank in Malaysia.

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

#7 – Best Robo advisor in Malaysia: Technology

Winners: BEST Invest (for using ‘robo-intelligence’), Kenanga’s Digital Investing (for using AI), Stashaway (for their technology-focused thematic portfolios)

Also good: The rest.

Tbh I’m not particularly convinced by AI or robo-intelligence, since it’s only as good as the data you feed them, and human biases in data collection is a well-documented issue.

BUT who am I but a no0b when it comes to technology. Plus thousands of datapoints are factored in, so theoretically that easily beat humans’ capabilities, so take this as an opinion at best.

I do like Stashaway’s thematic portfolios though. It’s like investing in tech startups, and that’s always tempting.

#8 – Fixed deposit alternative

Winners: Kenanga’s Digital Investing (KDI Save), Stashaway (Stashaway Simple)

Also good: Conservative portfolios from the other robo advisors

Fixed deposit is traditionally the best choice for investors looking for safest possible investment. It’s more to wealth preservation rather than wealth growthing strategy.

However, the downside is the money is ‘locked-in’ during the whole duration, from 1 month to 5 years. If you withdraw before maturity, no interest rate given to you.

In my opinion, the better choice is these cash management accounts. No lock-in at all AND guaranteed interest/profit rate. Aside from KDI and Stashaway, you can also check out Versa Asia and Touch N Go’s Go+ options.

P/s – Only Go+ is Shariah compliant, if that matters

Note: If you want to try Stashaway Simple, get reduced fee via my Stashaway referral code Malaysia in this link.

#9 – Which robo advisor in Malaysia has the best returns?

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 don’t care about anything else, I just want to get rich fast.

Unfortunately you can’t and shouldn’t do that, because all of the robo advisors can theoretically give you negative or positive double-digit annual return on investment, depending on the portfolio you pick (which in turn is recommended to you based on your answers in the risk appetite quiz).

In addition, your behaviour when investing makes a big impact to the returns. Choosing the portfolio which predicts high returns doesn’t matter if you are not suitable for it. If you selected one that is not suitable for your temperament, all you’re going to do is panic sell during bad market conditions.

(And don’t say ‘Oh I won’t one’ – you will. Unless you’re a psychopath who doesn’t experience emotions, chances are you will.)

Choosing your robo advisor

So, go back to the above categories and select a couple of robo advisors based on the criteria that are most important to you (as an example, for me Syariah-compliant is non-negotiable). Check the websites, download the apps and start your investing journey: time in the market > timing the market and all that.

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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