A study by the Life Insurance Association Singapore (LIA) released in 2018 discovered a combined gap of S$893 billion when it came to covering Mortality and Critical Illness needs among economically active Singaporeans1. What this entails, is that there remains plenty of room for Singaporeans to reap protection and wealth-building benefits from comprehensive financial advisory services.
Now the next question is: When it comes to seeking financial planning advice, should you go for the human connection or simply take it online with robo-advisers?
Let’s look at the hot keyword: Robo-advisers. They are essentially automated investing platforms that manage your money via algorithm. With low barriers to entry, they are an increasingly popular choice with first-time investors. These platforms are not new in Singapore, with some players being in the market for at least four years now. New players have continued to emerge with some estimates putting it at more than 10 robo-advisers in Singapore now2.
I would say that robo-advisers are handy and easily accessible options if you are new to the game and want to begin your investment journey. As I often share, time is of the essence; getting started ‘somewhere’ and ‘somehow’ will be better than procrastinating and not starting at all.
However, I do think that when it comes to wealth management, digital tools can act as a stepping stone for the human touch. Managing a portfolio of investments well over time, while minimising mistakes and maximising opportunities can be difficult and time-consuming to do completely on your own.
That being said, it is also crucial to remember that protection must go hand in hand with investment to provide a buffer against the unexpected.
As you grow into a more seasoned investor, you will likely encounter complex questions that are hard to quantify in a formula. Having a conversation with a human who is professionally trained to help you analyse optimal moves to counter the unexpected, would definitely help you avoid rash and emotional decisions.
As your wealth grows and your life goals become more nuanced, it will be beneficial to work with a human financial advisory professional who can help ensure you stay on the right track.