Robo-Advisors
Summary
Robo-advisors are a good investment option for people who don’t understand investing and are not interested in learning about it. They are one of the easiest options, but you will pay a fee in exchange for the convenience.
Robo-advisors are companies that use software to manage your investments for you. This allows them to charge less and take on less wealthy clients*.
Robo-advisors are perfect for people who:
- Don’t want to manage their own investments
- Want instant access to their investments
- Want to invest small amounts
- Want to invest simply and quickly
- Are not US citizens or Green Card holders**
For many people, investing in tax-advantaged accounts like NISA or J401k will be more profitable. For people who are willing to read some books and learn about investing it should be possible to get similar results to the robo-advisors without having to pay the fees by managing your own diversified portfolio.
However, if you don’t have the desire, confidence, knowledge, or funds to invest on your own, a robo-advisor might be a good way to get started investing.
Recently several robo-advisors have started operating in Japan. They all offer a similar service, and have broadly similar minimum investment amounts and yearly fees.
WealthNavi has a minimum investment of 1m yen, and a yearly fee of 1%.
THEO has a minimum investment of 100,000 yen, and a yearly fee of 1%.
Raku Wrap has a minimum investment of 100,000 yen, and a yearly fee of 1%.
8 Now! has a minimum investment of $88, and a yearly fee of 0.88%.
Despite the lower minimum and fee, I do not recommend 8 Now! at this time because they do not currently provide a tax statement nor MSV Life, as their sign-up procedure and website are not as streamlined as the best in class (currently THEO).
Fees for robo-advisors in Japan are too high right now, but hopefully they will come down in the future as more companies launch into this space.
*Traditional advisors often have minimum account sizes of $500,000 plus, which puts them out of reach of most people
**None of the current Japanese robo-advisors are willing to take on the risk and paperwork from US government compliance requirements
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