SINGAPORE, 12 APRIL 2022 — MoneyOwl, an NTUC social enterprise and Singapore’s first bionic comprehensive financial adviser, announced today the launch of a low-cost digital CPF investing service. With this addition, MoneyOwl is completing its suite of investment services, allowing Singaporeans to invest their CPF Ordinary Account (OA) savings on top of cash and Supplementary Retirement Scheme (SRS) funds. The digital robo-advisory platform is complemented by access to a full team of human advisers, who are salaried and provide comprehensive advice.
To make it easy and affordable for Singaporeans to invest their CPF OA monies, MoneyOwl has partnered with two well-known asset managers, Lion Global Investors and UOB Asset Management, to co-create the first two adviser retrocession-free CPF unit trust share classes in Singapore. These are: LionGlobal Infinity Global Stock Index Fund Share Class C, a unit trust that feeds into a passive Vanguard fund tracking the MSCI World Index, with exposure to more than 1,500 securities; and United SGD Fund Share Class D, a short duration global bond fund. The Total Expense Ratios (TER) of the two funds are 0.42% and 0.38% p.a.
Adviser retrocessions, also known as trailer fees, typically increase the TER of a unit trust by 60% or more. While there are CPF investment services in the market that rebate trailer fees to clients, this latest initiative by MoneyOwl and its partners simplifies the experience for CPF investors on top of lowering the cost of investing, by eliminating the wait for fee rebates and the need to reconcile the fund’s investment outcome with rebates received. Such share classes hardwire the benefit of being adviser retrocession-free into the funds’ structure, such that it is not dependent on any advisory firm’s business strategy. The LionGlobal Infinity Global Stock Index Fund Share Class C is already available on several platforms, while the United SGD Fund Share Class D will be available exclusively to MoneyOwl clients until the end of 2022.
“MoneyOwl is delighted to partner Lion Global Investors and UOB Asset Management to pioneer this next stage of CPF investing through the introduction of adviser retrocession-free share classes for top-quality investment funds. It is a significant step in lowering structural costs and providing simple and fit-for-purpose CPF investment solutions, to enable better investment outcomes for Singaporeans,” said Ms. Chuin Ting Weber, Chief Executive Officer and Chief Investment Officer of MoneyOwl. The cost of CPF investing had started to come down significantly from October 2018 onwards, when the Government eliminated sales charges on CPF investments and lowered caps on advisory fees in two stages to 0.4% per annum. Besides offering adviser retrocession-free portfolios, MoneyOwl will charge 0% advisory fee as an introductory offer for these new products for the rest of 2022.
In addition to cost, MoneyOwl’s other criteria in selecting the funds to make up its CPF investment portfolios include alignment to MoneyOwl’s philosophy of investing in market-based and globally diversified portfolios, the consistency of fund performance and the overall quality of the fund manager. “Very few funds make the MoneyOwl cut,” explains Ms. Weber. “As an adviser and not just a platform, we do not seek to multiply investment funds in terms of variety. Rather, we see it as our duty to simplify and rigorously curate the most fit-for-purpose solutions for the different financial goals of ordinary Singaporeans.”
“At Lion Global, we are constantly striving to live purpose beyond profit. One of the ways is structuring low-cost funds; and we are delighted to have found a like-minded partner in MoneyOwl. Together, we aim to unclutter the many layers of fees that stand in the way of better returns for investors,” said Mr. Gerard Lee, Chief Executive Officer, Lion Global Investors.
Mr. Thio Boon Kiat, Group CEO, UOB Asset Management, said “UOBAM is honoured to be part of MoneyOwl’s launch of their new digital CPF investing service. This is in line with our vision to democratise investing for the masses to boost their investment portfolios through cost-effective and easy-to-access digital solutions. Investors now have more options to grow their CPF monies, with greater convenience. We are excited that they can now access our low-cost flagship bond fund, which has enjoyed stable performance consistently for more than two decades, through this new service.”
MoneyOwl is known for its expertise in national schemes and holistic planning, and the new offering complements its CPF-related services and holistic financial advice. MoneyOwl’s Comprehensive Financial Planning service, the first digital-based service of its kind in Singapore, features a proprietary MoneyOwl CPF Analyser. More than 3,000 clients have taken up this service since its launch in January 2019. It also provides insurance advisory and a digital will-writing service.
Ms. Weber emphasises that the primary role of CPF in financial planning is not to fund investments, but to provide a reliable source of income in retirement. “The main job of an adviser when it comes to CPF is to help Singaporeans understand how to harness CPF’s innate, risk-free compounding power to grow their retirement sums at attractive interest rates, so that they can maximise CPF LIFE payouts in retirement. CPF investing is a secondary consideration and is not suitable for everyone,” says Ms. Weber. The firm’s stance is that CPF members should not invest their Special Account (SA) savings, as the CPF SA’s 4%-5% p.a. risk-free interest rate is hard to beat. While it is possible to do better than the CPF OA interest of 2.5% p.a. over the long run, investors need to have the risk appetite to stay invested for 10 years or more in suitable portfolios and even then, higher returns are not guaranteed. Before investing their OA, CPF members should set aside any funds needed for a possible property down payment or children’s education expenses. They may also wish to consider keeping an emergency buffer for their mortgage payments in their CPF OA, and/or transfer their CPF OA savings to their SA or that of their loved ones to build up their retirement sum at a higher interest rate as an alternative to investing it.