Planning our finances ourselves is not easy. Most of us need a trusted advisor who can help us systematically achieve our financial goals and guide us through life's many stages.

It’s key to find a financial advisor that acts as a fiduciary for your wealth. However, a survey by CFA Institute in 2018 shows that only 10% of Singapore investors believe their financial adviser or firm always put their interest first, putting Singapore as the second lowest ranked among 12 economies surveyed.

In this session Greg and Sam talked about:

  • How the CPFIS fee revision in October will affect the FA industry
  • Why having a trusted financial advisor is important
  • How Endowus acts as a fiduciary for your wealth, and what this means
  • Why a fee-only advisor is important to your wealth planning and the different type of fee structures in the financial advisory space
  • What holistic investment advice looks like for Cash, CPF & SRS with Endowus

0:00 Introductions

7:32 Different types of Financial Advisor in the market

10:34 Endowus as a Fee-only Financial Advisor in Singapore

23:15 QnA – On fee-based, fee-only Financial Advisor and Roboadvisors

28:55 CPFIS fee changes and its impact

31:55 Endowus vs Other CPF investment solutions

39:16 PIMCO Investing at the lowest cost through Endowus

43:25 Do I need a Financial Advisor, and what is it worth?

51:59 Financial Planning with Endowus – a goal-based approach

55:40 Acting in your best interest -Endowus as a fiduciary, as a financial advisor

Excerpts from the session - what is the value of a Financial advisor

How do we tell if a financial advisor is fee-based or fee-only? Would it be too expensive? (23:15)

Endowus: You should ask your personal financial advisor if they are fee-based or fee-only financial advisors. This can be confusing: there are financial advisors, fee-based financial advisors and fee-only financial advisors.

The true independent financial advisors are those that are only paid directly by clients, and do not receive any trailer fees from the product solution providers. This arrangement make it easier for them to stick to their fiduciary duty to serve only their clients’ interest.

On the other extreme there are the typical financial advisors who are taking commissions and a cut from selling insurance or insurance linked products, which are typically very high cost in nature. We believe that it is better to separate your insurance and investment. You should invest in low cost, globally diversified portfolios to give you the best chance of success.

Fee-based advisors receive a fee from clients, such as consultation and advisory fee, and they may be paid by the product providers, such as the insurance companies or the fund managers.

The cost varies, but do ask your financial planner and find out what kind of renumeration structure they are in

Is there a difference between robo-advisor and financial advisor? (25:52)

A Financial Advisor, as defined by the Monetary Authority of Singapore (MAS), is a regulated entity and conducts advisory services. The term “roboadvisor” is a colloquial term that is used to talk about an online platform that provides some form of wealth advisory services.

From a regulatory angle, there are 2 types of licenses issued out to “roboadvisors” in Singapore, one is the Financial Advisor license, which is what Endowus and Autowealth have, and the other is the Capital Markets Service license (retail fund manager license), which is what Syfe and Stashaway have.

Based on the licenses that are held, you can understand it that financial advisors recommend products for you to invest in; fund managers build products that you can buy. From that perspective you can understand how the different roboadvisors operate: the CMS license robos build products based on their active asset allocation strategy, or for certain investment theme (growth, REITs) and manage it like a fund manager, rather than an advisor. An advisor is more concerned about holistic advice and sourcing the right investment products.