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Online brokerages are becoming mainstream in Singapore, as are robo advisors. But what are the differences between an online broker such as moomoo versus typical robo advisors?
Here’s a comparison, comparing 5 major aspects that include commission fees, trading methods, market data, portfolio management and ease of signing up.
Bucking the digital trend
We see a shift in market share from traditional brokerages to online brokerages, with more users in Singapore adopting the latter than the former. It seems to be an “unstoppable” trend…but why is this so? Well, first of all, as more and more aspects of our lives move online, investing and trading are no different.
In the past, people mostly traded and invested through traditional brokers or the bank. This was a slow and tedious process as executing a trade or investment meant having to contact a broker or banker and have them manually buy or sell the assets.
These days, technology makes it easier than ever to invest without having to leave your home, or even bed (hello Smart Nation Singapore!). We’ve now got online brokers and robo advisors to help us execute and manage our trades or investments online. This reinforces the fact that online technology is empowering us humans, for example how we can easily find info via Google and attain “enlightenment” on a particular topic.
What are online brokers & robo advisors?
Online brokers are digital investment brokerage services, and robo advisors are digital financial advisors that run on algorithms monitored by humans, who keep the robo advisor on track with market conditions.
So between the new ways of investing through online brokers vs robo advisors; how do they stack up against each other? Let’s review and make a comparison of the differences between them.
Comparison between online brokers & robo advisors
Let’s get down to our review and comparison between an online broker such as moomoo and typical robo advisors.
We’ll look at 5 aspects. These include commission fees, trading methods, market data, portfolio management and last but not least, the sign-up process.
#1: Commission fees
ny commission fees you pay will eat into your potential profits, so this is one of the most important factors to take note of when choosing a platform.
Although the commission fees for online brokers and robo advisors are both minimal compared to a traditional broker, as a rule of thumb, robo advisors may tend to charge slightly higher commission fees than that of online brokers since you’re paying not just for the execution of the trades, but also for the trading method and algorithm.
Commission fees: moomoo (Online Broker) vs Robo Advisors
| moomoo (Online Broker) | Robo Advisors |
| 0.03% commission fee (Minimum of 0.99 SGD per order)
+ 0.03% platform fee (Minimum of 1.50 SGD per order) |
Depending on the platform, we’ve seen rates from 0.4% to 0.88% of AUM, to a minimum amount of $10 |
As you can see, robo advisors out there might charge higher fees than online platforms like moomoo. In addition, do note that platforms tied to a bank, be it a robo advisor or an online broker, might also charge higher fees.
#2: Trading method (Human vs Robots)
So, why are some people still willing to pay higher fees to use a robo advisor? That’s because robo advisors are marketed as an idiot-proof way to invest.
The concept of a robo advisor is very attractive, especially for beginners, as almost everything is automated. Based on your risk profile and goals you’ve entered into the app, your money will be automatically invested according to the robo advisor’s algorithm or trading method.
On the downside, using a robo advisor can be quite limiting as you do not have the flexibility to modify your portfolio, such as by buying individual stocks. Realistically speaking, you don’t receive a certain projected income by investing with a robo advisor — it really depends on the algorithm, the team managing the robo advisor, how the market is doing and so on…just like most investments, it’s not risk-free. For experienced or DIY investors, they might feel limited by the algorithm. Due to the lack of being able to fine-tune the robo advisor themselves, these savvy investors might lose out on market opportunities that the robo advisor didn’t take.
On the other hand, when it comes to online brokers like moomoo, you, the user, have full control over your own investment portfolio and risk. You can customise your portfolio, or take any trading approach you desire. You can invest into multiple asset classes, from REITs and ETFs to options and mutual funds, enter and exit at any point of time. In addition, with online brokerages like moomoo, you are equipped with a whole array of smart AI monitors, over 100 drawing tools, stock screeners, 24/7 financial news to help you strategize whilst you trade.
The downside is that using an online broker requires more know-how and decision-making than using a robo advisor. At a bare minimum, you need to do your research to know what you want to invest in, how much and when. After all, knowledge is power, and you’ll need this power to make informed trades so that you can gain from market opportunities — your reward.
#3: Market Data
Robo advisors do not offer much market data as users need not research and put together their own portfolios. However, when it comes to online brokers, the data being made available can make or break your trading experience.
You see, market data is essential to personalised trading. For example, real-time quotes (versus delayed quotes) display the actual or “live” price of the asset or derivative you’re viewing. This is key for the success of savvy traders, who need to be nimble to capitalise on market opportunities and to limit loss (if necessary).
Then you have level 2 market data, which is a set of detailed information about asset prices, offers and trading volumes that’s of great importance to day traders, high volume investors and those who rely heavily on technical analysis and data-based trading.
On moomoo, which covers markets that include US, UK, Singapore and China, you can get real-time quotes so you can monitor share prices down to the second. There’s also 24/7 financial news so you can stay updated on the latest developments, perfect especially since every investment involves risks and it’s recommended that you do your due diligence by keeping up with the latest updates in the market.
With moomoo, you can also get access to FREE US level 2 market data (this usually costs about S$40 on other platforms) that offers key information about stocks, including prices, liquidity volumes and order sizes, which traders can tap on while deciding on the next move — especially if you’re looking to build your portfolio with US stocks.
#4: Portfolio Management
Portfolio management involves overseeing your portfolio and making sure it continues to be in line with your risk appetite and your investment objectives. It can involve activities like portfolio rebalancing, which involves readjusting your investment holdings to reflect your risk appetite.
A good online broker should give you access to tools that enable you to manage your portfolio easily and efficiently. For instance, moomoo lets you easily manage your portfolio across different markets. For those trading in more than one market, this is essential as it enables you to see how one decision can affect your entire portfolio.
The moomoo trading app lets you manage your portfolio through a dashboard on the app which lets you see all your holdings at a glance.
When it comes to robo advisors, your portfolio is managed automatically, so all rebalancing will be done by the algorithm. This is good because it requires minimal effort on your part, but can be a stumbling block as the robo advisor cannot understand your risk tolerance as deeply as you can. What if your risk appetite is not aligned to your bank account’s risk tolerance? For example, you might buy into a high risk portfolio, assuming it will make you money quickly due to the potential growth in 10 years. However, you failed to ascertain if you’d need that money urgently. In addition, robo advisors don’t typically allow you to set your loss limit and there’s minimal risk management options. Hence, should the market crash and you need your cash urgently, you could be withdrawing your investment at a loss.
#5: Sign-up process & promotion
We’re all very busy people, and nobody’s got time for a lengthy or troublesome sign-up process.
On this note, both robo advisors and online brokerages take about the same amount of time to sign up, open an account, set up your deposits and start your investing journey.
moomoo’s sign up process is totally fuss-free, it took only about 5 minutes. Just download the app, click “Open Account” and fill in the form with a valid email address. As an added bonus, moomoo offers a great deal of welcome gifts exclusive to new members! If you’re looking to start investing, ride on their latest limited-time promo , deposit a minimum of S$2,700, spin the wheel and draw a free share*. Currently they are giving up to a Tesla share worth around S$1,200.
*Terms and conditions apply
What we think: Online brokers vs robo advisors
To summarise, here are some of the key points of comparison between the platforms mentioned, as well as our own subjective score out of 5 — this is based solely on our own personal viewpoint and trading preferences (you can see we prefer to DIY and take control of our trades), you might have a different opinion.
Always do your own research and exercise your own due diligence when making any financial decisions, including choosing your preferred platform, trading method and trades. You might prefer to use a combination of the various platforms, depending on how they suit your investment needs.
moomoo Online Broker vs Robo Advisors
| Online Broker moomoo | Robo Advisors | |
| Commission fee | 0.03% commission fee (Minimum of 0.99 SGD per order)
+ 0.03% platform fee (Minimum of 1.50 SGD per order) Our score: ***** |
Depending on the platform, we’ve seen rates from 0.4% to 0.88% of AUM, to a minimum amount of $10
Our score: *** |
| Trading method | Human
Our score: ***** |
Automated, but able to set some preferences prior
Our score: *** |
| Market data | Free real-time quotes, level 2 market data and 24/7 financial news
Our score: ***** |
Depends on platform, might need to manually search for the info on your own |
| Portfolio management | Possible across markets
Our score: ***** |
Automated, but able to set some preferences prior
Our score: *** |
| Sign-up process | Apply via app
Our score: ***** |
Apply via app/online
Our score: ***** |
Take the wheel of your personal financial portfolio
From the comparison above, though robo advisor fees could be slightly higher than that of online brokers, having a robo advisor that allows us to passively invest money ain’t too bad too.
Then again, if you enjoy automation, you can also explore moomoo’s Money Plus. This means that with moomoo, you’re able to visualise and manage both automated and manual investments all in one app.
Ultimately, time is money, so while we enjoy paying lower commissions and fees, we’d also rather not be jumping through hoops like a bank’s application hurdles and accumulating cred to access market data…
Do think about your own investment goals and trading styles — though it doesn’t hurt to get on each platform to explore the smart investment tools that are available (also a very important factor!) before you decide to plonk any money in.
Start investing with moomoo for lifetime commission-free trades on top of 1 year $0 platform fee on US market trading*. This is available for both new and existing “moo-ers”. For a limited time, spin and get a sure-win share*. Receive up to 1 Tesla share worth around US$1,000.
*Terms and conditions apply.
This advertisement has not been reviewed by the Monetary Authority of Singapore.