Finance Smiths

Personal finance apprentices-in-training

Increasing my monthly funds transfers to Smartly and StashAway

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As I have mentioned in my previous post, I recently opened a Smartly robo-advisor account with my wife’s referral code. This was introduced recently by Smartly, probably as a response to StashAway’s referral program that was introduced a few month’s back. Competition among the robo-advisors in Singapore is already starting to translate into monetary benefits for retail investors i.e. in the form of platform/account fee waiver for this case.

I reckon the greater the number of retail investors that open accounts with Smartly and StashAway in Singapore, the higher the probability that their platform/account fees might actually reduce over time. Which means as account holders of both Smartly and Stashaway, I now have every incentive to encourage more retail investors to sign up. However, I have been asked by readers why they are unable to find my referral code/link on my blog.

The reason is that my intention for now is not to monetise my blog in any way. I don’t wish to influence your analysis and decision on whether to open accounts with Smartly and StashAway in Singapore or which one to choose. You have to read and understand both their methodologies, approaches and even what robo-advisors are in the first place before you decide.

However, if you choose to open a Smartly or StashAway robo-advisor account in Singapore, I would recommend you obtain a referral code/link to enjoy the platform/account fee waiver. It can be anyone that already has an existing Smartly or StashAway robo-advisor account, since he/she would be able to provide you with a referral code/link. Don’t miss out on the platform/account fee waiver since it can help to lower your costs in the long run.

After I set up my Smartly robo-advisor account, I had another look at my existing banking Standing Instructions to transfer cash funds into my StashAway robo-advisor account (S$100 per month). Given how my belief in the benefits of the rebalancing effect and effectiveness of Smartly and StashAway in Singapore is growing, I decided to set up more Standing Instructions with my bank. It’s now at S$100 per week into my Smartly and StashAway robo-advisor accounts alternating between both of them from week to week. Which comes up to S$400 per month, a significant increase from my previous arrangement.

I fully support the growth of robo-advisors in Singapore and I will continue to support them as long as they act in the interests of the retail investors. I hope Smartly and StashAway will continue to grow and improve over time. Perhaps even lowering the platform/account fees eventually?

StashAway Referral Programme as an incentive

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I have mentioned in my previous posts about setting up StashAway and Smartly Singapore robo-advisor accounts for my wife. But I didn’t set any up for myself. My plan was to be a spectator and just monitor how those accounts performed. It was tempting to set one up for myself just so that I don’t feel left out by our venture into FinTech personal investment management.

Then my wife received an email about the StashAway Referral Programme. It makes sense for these relatively new robo-advisors to offer referral incentives to encourage more customers to sign up and open accounts with them. After all, it’s essential they capture as much market share as possible since new entrants may eventually come in to compete with them.

By the way, this is not a sponsored post. I’m not going to even provide my wife’s StashAway referral link in this post or on my Resources blogpage. But it’s always fun to have a closer look at a Referral Programme since we only get to participate in a few of them such as Uber and Grab.

For the StashAway Referral Programme, this is how it works for my wife. For every friend she refers and who funds their account by at least S$1, both of them are entitled to a 6 month platform fee waiver for up to S$10,000 of Assets Under Management (AUM). If a 2nd friend is referred, it goes up to S$20,000 of AUM for my wife. There’s no limit on the number of referrals.

This is a decent starter Referral Program by StashAway but it definitely has room for improvement. My wife only has less than S$1,000 in her StashAway account that is still expected to be less than S$10,000 in 6 months time. Hence, there’s no incentive for her to referral multiple friends. In fact, one friend is sufficient and that’s me! So I used her referral link to sign myself up and open a StashAway account with S$100 initial deposit and S$100 monthly transfer.

The fee savings tipped me over the edge but wasn’t actually the main reason behind me opening the account. I have always been a big supporter of retail consumer FinTech developments and believe that the growth of viable savings and investments alternatives should be encouraged. I know the most efficient approach is to contribute the additional S$100 to my wife’s StashAway account to achieve lower fees sooner. But it’s a small monthly amount and I’m willing to accept the higher costs as a show of support. More importantly, I’m interested to see what Smartly’s response will be!

Should I invest in Cryptocurrency?

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I have been reading GMGH’s recent posts about Cryptocurrency. The latest one being Don’t Crybaby To Me About Bitcoins & Cryptos. His posts piqued my interest in Cryptocurrency, which is a financial topic that I have no knowledge of. Not even a cursory understanding of it. I know it is a digital currency that used encryption/cryptography to generate money and verify transactions. Examples of Cryptocurrency are Bitcoin, Ethereum and Litecoin. There’s a Cryptocurrency Wallet that is a secure digital wallet used to store, send and receive digital currency. This technological development is expected to revolutionise and change the world.

GMGH talks about Cryptocurrency exchange in Singapore and mentions Coinbase. I went to have a look and it seems like a simple and well-designed platform to buy and sell digital currency. I check the 1 month price history of Bitcoin, Ethereum and Litecoin on the Coinbase website and this is what I found.

Bitcoin

Ethereum

Litecoin

Is it considered an Alternative Asset?

The rate of returns in the past month are much higher than any other asset class. Which brings me to my next question. Would you consider Cryptocurrency an Alternative Asset? It refers to assets that have not been traditionally considered part of an investment portfolio. Examples of traditional asset classes being stocks and bonds. But I am confused. I thought Cryptocurrency is a transfer or payment mechanism. How can it be a store of wealth as an alternative asset class? Then again, cash can be used to make payments and transfer wealth, hence it is considered an asset class. Plus Cryptocurrency does have asset-like characteristics. It has a limited supply and is traded on exchanges in multiple currencies around the world.

Do I have sufficient cash funds to take a position in Cryptocurrency?

Knowing nothing about Cryptocurrency and investing in it is the fastest way to get burnt. Before I decide to pursue this any further, I want to know whether I have enough cash to take a position. Our investment portfolio has been overweight on cash for a while, which suggests I have room to allocate a portion of it to Cryptocurrency. I have always wanted to start building up an alternative asset component of our asset holdings. Perhaps now is the time to start exploring this further. But I really should read up on Cryptocurrency first and I will need to convince my wife about this. Wish me luck!