Frequently Asked Questions (FAQs)
Last Updated | 28th October 2017
Safeguards
Is AutoWealth licensed or regulated by the Monetary Authority of Singapore (MAS)?

Yes, AutoWealth has a Financial Advisors licence (Licence No.: FA100064-1) issued by the MAS and the company is regulated under the Financial Advisors Act.

How secure is my investment capital invested through AutoWealth?

In accordance with the Financial Advisors Act, AutoWealth clients’ monies and portfolio assets are held in a personal and segregated custody account at HSBC through Saxo Capital Markets, our partnering MAS-licensed financial institution that is regulated to provide custody services. This means that monies and portfolio assets legally belong to the client and are fully segregated from AutoWealth or Saxo Capital Market’s own monies and assets. Clients enjoy full protection against the insolvencies of both AutoWealth and Saxo Capital Markets.

Key Benefits of AutoWealth
How will AutoWealth help me achieve my financial goals?

AutoWealth help clients achieve their financial goals in 4 simple steps:

  1. Clients tell the AutoWealth Platform information about themselves through a concise online questionnaire;
  2. Clients receive and review the recommended risk profile and corresponding investment portfolio tailored according to their responses;
  3. Clients decide and open an investment account with AutoWealth at their convenience;
  4. AutoWealth manages clients’ investment portfolios, from portfolio construction to periodic rebalancing, while clients access their investment accounts anywhere anytime 24/7 to see their investments grow over time.
What value does AutoWealth brings to me?

AutoWealth delivers significantly better returns than most mutual funds (unit trusts).

AutoWealth charges a fee as low as 1/4 that of mutual funds (unit trusts).

AutoWealth manages clients’ investment portfolio from end to end while clients sit back and enjoy.

Investing Through AutoWealth
What will I be investing in?

All AutoWealth investment portfolios feature a portfolio mix of Equity (Stocks) and Fixed Income (Bonds), diversified across major geographical regions in the world including U.S., Europe and Asia Pacific and diversified across major industries including oil & gas, materials, industrials, consumer goods, health care, consumer services, telecommunications, utilities, financials & technology.

This means AutoWealth’s investment portfolios are generally more defensive against market turmoil and recessions than an investment portfolio that is concentrated in a particular asset class (eg. stocks) or geographical region (eg. Euro-Area) or industry (eg. technology).

AutoWealth achieves the strong diversification effect cost-efficiently through index-tracking Exchange-Traded Funds (ETFs) listed on the New York Stock Exchange and NASDAQ.

How does AutoWealth select the Exchange-Traded Funds (ETFs)?

AutoWealth has a rigorous process to screen over 6,000 ETFs listed globally and select the best ETFs based on factors including diversification effect, direct holdings of underlying Bonds or Stocks, reputation of the ETF provider, ETF fund size, liquidity and expense ratio amongst other factors.

How does AutoWealth’s investment performance compare with a bank savings account?

For the last 12 months from June 2016 to June 2017, the AutoWealth Balanced Portfolio (40% Govt Bonds, 60% Stocks) registered 10.4% net returns due in part to our investment strategy and in part to conducive financial markets. As a reference, MAS core inflation is 0.7%1, interest on banks’ savings account is 0.2% per annum and 12 months fixed deposit rate is 0.3% according to MAS’s statistics2.

AutoWealth Preservation Portfolio
(80% Govt Bonds, 20% Stocks)
12 months Fixed Deposits
Investment Returns Projected: 5.4%3 Current: 0.3%2
Profits based on S$10,000 invested over 10 years S$6,920 S$335

1July 2017 statistics http://www.singstat.gov.sg/docs/default-source/default-document-library/news/press_releases/cpijul2017.pdf

2July 2017 statistics https://secure.mas.gov.sg/msb/InterestRatesOfBanksAndFinanceCompanies.aspx

3Projections are based on robust financial modelling and past performance of portfolio assets. Although such projections are grounded on sound financial concepts, you should not assume that the future performance of portfolio assets or investment products referred to on the Platform will necessarily correspond to the projections.

How does AutoWealth’s investment performance compare with mutual funds (unit trusts)?

For the last 12 months from June 2016 to June 2017, the AutoWealth Balanced Portfolio (40% Govt Bonds, 60% Stocks) registered 10.4% net returns1due in part to our investment strategy and in part to conducive financial markets. This significantly outperformed the median performance of global balanced mutual funds available in Singapore via fundsupermart.com (Global Balanced Mutual Funds: 8.1% net returns).

AutoWealth’s superior investment performance is in line with many financial research, including the well-established SPIVA Scorecard by S&P Dow Jones Indices2, which concluded that a large majority of professional fund managers consistently underperformed market-tracking investment strategies like AutoWealth’s over the short-term, medium-term and long-term.

1Past performance is not a guarantee of future results. You should not assume that the future performance of portfolio assets or investment products referred to on the Platform will necessarily correspond to past performance.

2https://us.spindices.com/documents/spiva/spiva-us-year-end-2016.pdf

What is the investment performance I can expect?

Depending on the client’s risk profile and the corresponding investment portfolio recommendation, the projected1 returns ranges between 5% to 7% per annum over the long-term.

1Projections are based on robust financial modelling and past performance of portfolio assets. Although such projections are grounded on sound financial concepts, you should not assume that the future performance of portfolio assets or investment products referred to on the Platform will necessarily correspond to such projections.

Will I receive dividends investing through AutoWealth?

Yes, clients receive dividends on the Stock ETFs and bond coupons on the Govt Bond ETFs they have invested in through AutoWealth. Clients have the option of reinvesting the dividends/bond coupons or receiving the dividends/bond coupons in cash through distributions back into their designated bank accounts.

Will dividends be subject to U.S. federal withholding tax?

Yes, dividends and bond coupons will generally be subject to a 30% U.S. federal withholding tax in line with tax regulations of the U.S. Internal Revenue Service.

How long should I stay invested?

AutoWealth’s investment portfolios are intended to generate market returns over the medium to long-term and are not suitable for short-term speculation. Generally, AutoWealth advise clients to take a long investment horizon as far as is practical. Our investment strategy is designed to ride out an entire market cycle including any market downturn or recession.

Unlike some mutual funds (unit trusts) or hedge funds, AutoWealth has no lock-in period for investments. Clients are free to withdraw their investment capital or close the investment account anytime.

Can I change my portfolio mix after starting the investments?

Yes, clients may request a review or change in portfolio mix through the AutoWealth platform.

What is rebalancing? How does it affect me?

Significant market movements may cause portfolio assets to deviate from their original intended allocation weightage. For example, Brexit caused Europe Stocks to decline materially and International Government Bonds to rise materially, causing an underweight in Europe Stocks and an overweight in International Government Bonds.

AutoWealth rebalances clients’ investment portfolios timely to realign the allocation weightage of portfolio assets for robust risk management and to maintain a consistent risk profile for all our clients.

Our rebalancing is supported by well-established research, including those documented in “Pioneering Portfolio Management [David F. Swensen, CIO of Yale Endowment Fund]”. The research concluded that rebalancing statistically generates extra investment returns by exploiting excessive price volatility.

Can I invest through AutoWealth if the financial institution I work for prescribes a strict compliance pre-clearance process or guidelines governing my personal investments?

Yes, you will be glad to know that we have clients who work for financial institutions that prescribes strict compliance pre-clearance processes or guidelines governing personal investments.

AutoWealth can provide you with a Certification of Managed Investment Account letter, which is addressed to your financial institution's compliance department. The letter will certify that AutoWealth takes a market-returns approach, the investment account is managed on your behalf with trades being executed in accordance with our market-returns approach, and that the company does not accept orders to trade in specific securities at the direction of the client.

Fees & Charges
What are AutoWealth’s fees and charges?

AutoWealth charges a very competitive Advisory Fee of 0.50% per annum on the assets under advice and Platform Fee of US$18 per annum.

As an illustration, a typical client who invests S$10,000 pays about S$6.25/month in total fees and charges. In this example, AutoWealth’s fees and charges on a monthly basis is lower than a MacDonald’s Big Mac meal, although financial planning is far more important (no offence Macs, we still love you).

In contrast, mutual funds (unit trusts) typically charge about 2% in aggregate for sales charge, annual management fees, custody fees and other hidden fees and AutoWealth’s fees and charges are as low as 1/4 of these mutual funds (unit trusts).

Will I be charged a higher Platform Fee if I increase my investment amount or as my investment portfolio grows?

No, the Platform Fee of US$18 per annum is a flat fee regardless of the investment amount.

Do I have to pay any transaction, custody or other fees?

No, transaction and custody fees will be absorbed by AutoWealth through the Platform Fee of US$18 per annum.

Therefore, AutoWealth clients enjoy lower transaction and custody costs vis-à-vis DIY investors who typically pay in excess of S$120 to purchase five to six Exchange-Traded Funds to construct their investment portfolios.

How are AutoWealth’s fees and charges collected?

AutoWealth Advisory Fees and Portfolio Fees are pro-rated and debited from clients’ investment accounts at the end of every calendar quarter. No action is required from clients.

My Investment Account
What is the minimum investment amount?

Clients can start investing through AutoWealth to achieve their financial goals with as little as S$3,000. Investors can now look forward to better investment performance, lower costs and a hassle-free experience.

How can I fund the investment account?

Clients may fund their investment accounts through:

  • Bank transfer
  • FAST transfer
  • Telegraphic transfer (subjected to your designated bank charges, if any)
  • Cheque

from a bank account opened in the client’s name.

In line with anti-money laundering laws and regulations, AutoWealth and our partnering MAS-licensed custodian do not accept third-party funding and will return funds received from any third-party accounts to the sender.

Can I have a regular investment plan (i.e. Dollar Cost Averaging)?

Clients who make regular contributions to their investment plans would be able to Time-Diversify (ie. Dollar Cost Averaging) their investments and improve the risk-based returns over the long run.

Clients can set a recurring monthly or quarterly funds transfer to the investment account via online banking services provided by their respective banks. Kindly set the date of transfer as either the 1st or 12th of the month. Once the funds are received and booked after the 1st or 12th of each month, AutoWealth will invest the investment capital on the next available market day, or as soon as is practical.

Clients may refer to the following step-by-step instructions to set recurring monthly or quarterly funds transfer:

- DBS: https://www.autowealth.sg/dbsrecurring

- OCBC: https://www.autowealth.sg/ocbcrecurring

- UOB: https://www.autowealth.sg/uobrecurring

Can I withdraw my investment capital if I suddenly need the funds?

Yes, clients may login to the AutoWealth Platform anytime to submit the withdrawal request.

AutoWealth will facilitate the withdrawal of your portfolio cash balance and/or liquidation of your portfolio assets, in full or in part, whichever applicable, in the next available market day or as soon as practical for any withdrawal request made through the Platform on or before 5pm SIN/HK time.