Robo-Advisor Updates

Seriously dude, everyone is sick of this robot stuff already…


A few quick robo-advisor updates -I know you’ve been waiting for these 😉

1. Rakuten has started a new robo-advisor service! It looks very similar to Theo (100,000 yen minimum, 1% in fees). I’ll be opening an account soon so expect a full review once I have a chance to play with it.
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2. 8 Now! are really starting to annoy me with their quirky ways of doing things and passive-aggressive emails after the fact… I already mentioned how you are supposed to inform them before transferring money, right? They also have the option of including your account number in the transfer information field, which I did, only to get the same email asking me to include my account number. The latest thing is that they take the account fees out of your cash account, not the funds under management, so I got another email today ‘reminding’ me of this thing they hadn’t told me yet and asking me to put money in ASAP.

3. I looked at my THEO account, and they seem to be doing tax-loss harvesting (deliberately selling funds at a loss and replacing them with similar funds in order to reduce capital gains taxes later). Great stuff. They also sent out some good explanatory emails post-Brexit. Overall I am really happy with their service.

So my robo-advisor advice remains unchanged: for now THEO is the best, 8 Now! is cheaper but the service kind of sucks, WealthNavi’s minimum investment is too high, and we’ll see how Rakuten measure up. They’d have to be much better than THEO to get me to switch, as one reason I like having a robo-advisor is to diversify where my investments are -having them all in Rakuten would worry me a bit, even though I think they’re a great company.

Anyone else trying out the robo-advisors? Any new ones I should know about?

5 Responses

  1. Knowing how Rakuten operates using their business model, they will definitely tie their robo advisor service with their brokerage, retail banking and consumer credit account via a gamification model.
    Most probably something along the lines of fund, or maintain a certain balance in, the robo-advisor account via their credit card or bank account, and then link it with the brokerage account for one-off and/or monthly recurring time limited bonus points.
    As per usual, they are taking too huge a cut despite using low cost mutual funds to the point that I personally will not recommend them to anyone. Perhaps the word Rakuten Wrap, as in wrap account, explains why the entire industry is charging 1% annually =)

    1. “As per usual, they are taking too huge a cut despite using low cost mutual funds to the point that I personally will not recommend them to anyone.”
      Are you referring to using Rakuten Securities, or just to Rakuten Wrap? If the former, whose service would you recommend? I use Rakuten but am always eager to learn of alternatives 🙂

  2. I keep hoping a new challenger will enter and charge much lower annual fees that trigger a price war resulting in 0.3% or so fees, but maybe this is overly optimistic?
    This is Japan, after all 🙂

    1. I think roboadvisors in the US are also close to 1% in fees, from what I quickly gathered (e.g. Personal Capital is 0.89% for something that is mostly robo-based + a bit of human management). So on this one I feel Japan is on par with the US?

      1. Hi SB
        I think Personal Capital is a hybrid. For 0.89% you get an actual human financial advisor.
        Wealthfront charges 0.25%, and the first $10,000 is free!
        Betterment charges 0.35% (0.15% on accounts larger than $100,000)
        Both of those are much cheaper than the options we currently have in Japan.
        Still early days though. Hopefully prices will come down eventually 🙂