MoneyOwl, NTUC's bionic robo adviser, winds up after five years

A 'bionic' financial adviser combining robo portfolios with human financial planning for Singapore's mass market.

That mass-market Singaporeans would pay for comprehensive, subsidised financial planning — wills, insurance, investments — from a robo-plus-human adviser.

S$10 million initial paid-up capital from NTUC Enterprise (60%) and Providend (40%); S$12 million by 2023.

Set up by NTUC Enterprise in 2018 as a social enterprise expected to become self-sustaining, absorbing Providend's DIYInsurance business.

Reached a contact base of 91,000 and 45,000 accounts, with 23,000 signed up for one of four services; Providend divested its 40% in 2022; efforts to sell the business or find partners were stymied by the social-enterprise model.

Wind-up announced 31 August 2023; investment and insurance businesses transfer to iFast Financial; 7 of 40 staff move across, the rest retrenched.

Only one in ten account holders would pay for anything — planning was valued but not bought.

The social-enterprise pricing model left no margin to cover client acquisition, technology and salaried advisers.

Sale or partnership exits were constrained by the model itself, per the review.

The competitor set proves the point: Endowus, with a similar mission, still lost S$26.7m in a year and needed fresh capital.

'A gap in the market, but no market for the gap': need does not equal willingness to pay, especially when the mission prices the service below what it costs.

As of 31 August 2023, clients transact on MoneyOwl's portal until 24 October and move to iFast from 25 October; portfolio fees and DFA trail-free fund access continue. Retrenched staff get compensation packages in line with market norms. Endowus had just raised US$35m, expecting more robos to exit the industry.