Robo Advisors

They are multiplying!


It seems like 2016 is the year of the robo-advisor in Japan. I am aware of three services operating right now, with more on the way.

Robo-advisors are financial services that use software to replace humans for portfolio management. This should result in more consistent results and lower fees.

I am very excited about the rise of robo-advisors in Japan. I think this development has a huge potential to help a lot of people get started investing.

The benefits of robo-advisors are that they will provide you with a diversified portfolio and rebalance it for you. All you have to do is put money in.

The current disadvantages are that you can’t use tax-advantaged accounts like NISA or J401k, and the fees are too high at the moment.

The three services I am looking at are:

8 Now!
This service requires an $88 minimum deposit and charges 0.88% a year.

THEO
This service requires a 100,000 yen minimum deposit and charges 1% a year.

WealthNavi
This service requires a 1,000,000 yen minimum deposit and charges 1% a year.

Right now I think the annual charges are too high for all of these, but with increased competition they should come down in the future. It seems like they all provide basically the same service.

I have a THEO account that I am quite happy with, and am currently opening an account with 8 Now! for comparison purposes.

I was planning to open a WealthNavi account as well, but a million yen is a bit too much for me just to be able to write about it on this blog šŸ˜‰

Any other robo-advisor services I should know about? Any good or bad experiences?

7 Responses

    1. Hi David
      I just emailed 8 Securities to ask, and I’ll post here when they get back to me.
      All the best

      2. Hi David
        Bad news I’m afraid (but not unexpected). Due to unwillingness to deal with the US government and their reporting requirements, 8 Securities will not accept customers with US citizenship or residency permits.
        Your best bet is probably Interactive Brokers or a US-based company.

  3. Hi again! šŸ™‚
    Forgot to ask — how does Theo compare to the Rakuten robo these days?
    And, how safe is Theo in the long run? Is it protected? (If Rakuten can offer a very similar predict, Rakuten seems to be ‘safer’ in the long run–but that’s just a gut feeling. How about you?).
    What are your thoughts?
    I’m seriously considering using a robo for the ‘extra savings’ division. Just need to choose which one now šŸ™‚
    Thanks!

    1. I stopped using Raku Wrap a while back: I found it much less user-friendly than THEO.
      Looking at the website, Rakuten doesn’t really seem to be pushing it any more. They still have a 100,000 yen minimum and charge about 1% (the site says ‘under 1%’ but it’s near enough.
      As for how safe THEO is, they keep customer assets separately and operate under the supervision of the financial authorities (and are covered by the same guarantees as other institutions).
      They seem to be doing well setting up partnerships with other banks, etc.
      My take is that there is a small chance of them going out of business, but a tiny one of that costing you money.