SINGAPORE: Singaporeans shared their concerns on the recent Endowus fee hike on cash management portfolios. Social media user sanchopanza8888 posted on r/singaporefi, sharing, “Endowus just TRIPLED fees on cash portfolios.”
The post has triggered reactions among Singaporeans, with many contemplating switching to alternative investment platforms. Some individuals advocated for self-directed investing through brokers like Tiger and Moomoo, stating:
“Just do it yourself through brokers like Tiger and Moomoo,” as it is “cheaper.”
Another was a bit optimistic about the changes, saying, “Looks it pretty much affects portfolio of cash/money market / FDs / short-term bonds. I think folks who invest in broader index funds won’t get affected.”
However, another disagrees, stating, “Hmm, this is the biggest risk investing in Endowus. They are cheap now but I foresee them raising fees down the road.”
Why is Endowus increasing its fee for cash management portfolios?
In line with an update on the Endowus website, they are increasing their fee for cash management portfolios because of the rising global costs.
The fee change includes cash management goals using Cash Smart and Fund Smart. The company said the adjustment was necessary to sustainably enhance its offerings and meet client needs effectively.
The fee change will take effect on 1st May 2024. If you have cash management portfolios set up before this date, the fee remains unchanged at 0.05% per annum.
The fee increase will affect you if you invest in Cash Smart or have cash management goals through Fund Smart. Starting from 1 May 2024, the fee will rise from 0.05% to 0.15% per annum.
This change applies to all cash management goals, including funds denominated in USD or AUD.
For instance, if you invest $1,000, the fee increase means an extra $1 in yearly fees. However, Endowus clients will still receive 100% Cashback on trailer fees, helping to offset costs.
Funds like the Fullerton SGD Cash Fund and Lion Global SGD Enhanced Liquidity Fund offer Cashback of 0.08% p.a. and 0.13% p.a., respectively, which can reduce overall expenses and improve investment returns.
The fee change affects investments under the ‘cash management’ goal type, including Cash Smart and funds within the ‘Cash/money market’ asset class.
Accredited Investors can check for AI-only ‘Cash/money market’ funds under Fund Smart after logging into their Endowus account.
The Endowus fee covers various services, including investment advice, portfolio creation and rebalancing, brokerage, and transfers in SGD. Endowus doesn’t charge sales commissions and provides 100% Cashback on trailer fees.
Although Endowus explained the fee hike, some are just saddened by the steepening of the fees. One user said, “Is also that the magnitude of the increase is so drastic. One of the advantage of Endowus is low cost. 3x increase is rather steep.” /TISG