Do You Use A Robo Advisory Firm In The United States, Canada, Australia or the UK?

andrew hallam

andrew hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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43 Responses

  1. Antony Murphy says:

    Dear Andrew,,

    I attended a talk of yours at the British School, Muscat, and found it very interesting. i have looked into investing and came across the following link:

    https://www.lloydsbank.com/investments/investment-account.asp#tab-row-1

    I bank with this bank in the UK and was wondering if what they are offering is the same as the Index Fund that you spoke about. The investments that they offer are split into three areas similar to what you spoke about.

    Could you offer any advice about how septic this account maybe.

    Thanks for your time

    Antony

    • Hi Antony,

      First thing first.

      You live in a capital gains free zone. But you are asking about investing in a firm that (I believe) is domiciled where capital gains will be taxed.

      Even with its added tax liability, it would still be better than the Septic Seven. But you could have a far more efficient portfolio than this:

      This firm charges a management fee of 0.45%. Then, you pay Scottish Widows a hidden fee for your funds. It doesn’t look like the blended portfolios you linked to are indexed. So if they use Scottish Widows actively managed funds, you will pay about 1% per year for those, plus 0.45% for your platform costs, plus, you will likely pay capital gains taxes on your gains.

      Any chance you could find someone who has a copy of my book? I think you might find it really useful. https://www.amazon.co.uk/Global-Expatriates-Guide-Investing-Millionaire-ebook/dp/B00N99IK74?ie=UTF8&*Version*=1&*entries*=0

      Cheers,
      Andrew

  2. Jason says:

    Hi Andrew,

    Are you going to provide an update on Chris’s portfolio from chapter 6?

  3. Index says:

    Andrew,

    I have a few questions after having read your book which is great by the way.

    Looking at Table 17.4 on page 239 of your book (Global Nomad’s Couch Potato Portfolio), I am thinking that instead of the global government bond ETF (SAAA), I would prefer to have two ETFs – a $ shorter duration corporate bond (e.g. SDIG) and a $ shorter duration government bond. The main reason is the shorter durations but also to diversify. What do you think?

    I also have a wider strategy question that perhaps should have come first. I have existing (expensive) mutual fund investments in USD and GBP that I plan to liquidate and use to build low cost ETF portfolios. I am thinking about maintaining separate USD vs. GBP portfolios. For USD (bulk of the funds), essentially the Global Nomad’s Couch Potato Portfolio. For GBP, essentially Table 17.3 Couch Potato Portfolio. I am British (age 45) married to a Lebanese (age 40) – we are currently resident in UAE, not really sure where we are going to retire, possibility that we might have to spend some time back in the UK for my work (but not retirement). In short, lots of uncertainty – not least because I work in the oil & gas business. What do you think about this ‘strategy’? I see it as hedging my bets a bit.

    Final question – can you recommend a global property ETF on the London market (I only have access to ETFs traded on the London market)? I was looking at HPRO or DWGRS. I like a small amount of property, say up to 10%, to diversify.

    Many thanks for your time.

    Regards – Index

  4. tdb says:

    Hi Andrew,

    First of all thank you. I’ve read your first book and just started investing at the age of 23. I wish I would have read it earlier! I love the way you introduced me to this relatively easy way of investing, without any prior experience. I’ve recommended your first book to a ton of friends haha.

    I’ve actually got 2 questions in this case.

    First question: I just bought myself VOO and VEA, effectively tracking the S&P 500 and the developed world ex-US. I decided to leave upcoming countries out of the equation since they ( feel ) as a less safe bet, and seem to be performing mediocre lately. Could you tell me what the pro’s and con’s are in your experience when including/excluding these?

    Second question: I’m from Europe, so for my short-term bond tracker I’m looking for a short-term euro listed ETF. Could you tell me why exactly a short-term bond is better? And do you happen to have any suggestions as to which might be ‘good deals’ at this moment? I’d love to hear your opinion.

    I’m planning on buying your second book soon! If it’s got half of the value of your first book it’ll be a great deal. ?

    Thanks in advance for your reply! Have a great day.

    Friendly regards tdb

  5. Index says:

    Andrew,

    I have a few questions after having read your book which is great by the way.

    Looking at Table 17.4 on page 239 of your book (Global Nomad’s Couch Potato Portfolio), I am thinking that instead of the global government bond ETF (SAAA), I would prefer to have two ETFs – a $ shorter duration corporate bond (e.g. SDIG) and a $ shorter duration government bond. The main reason is the shorter durations but also to diversify. What do you think?

    I also have a wider strategy question that perhaps should have come first. I have existing (expensive) mutual fund investments in USD and GBP that I plan to liquidate and use to build low cost ETF portfolios. I am thinking about maintaining separate USD vs. GBP portfolios. For USD (bulk of the funds), essentially the Global Nomad’s Couch Potato Portfolio. For GBP, essentially Table 17.3 Couch Potato Portfolio. I am British (age 45) married to a Lebanese (age 40) – we are currently resident in UAE, not really sure where we are going to retire, possibility that we might have to spend some time back in the UK for my work (but not retirement). In short, lots of uncertainty – not least because I work in the oil & gas business. What do you think about this ‘strategy’? I see it as hedging my bets a bit.

    Final question – can you recommend a global property ETF on the London market (I only have access to ETFs traded on the London market)? I was looking at HPRD or DWGRS. I like a small amount of property, say up to 10%, to diversify.

    Many thanks for your time.

    Regards – Index

  6. Index says:

    Hi Andrew,

    Many thanks. I’m struggling to conclude on the bond element of my planned USD portfolio. Can you suggest any short duration corporate bond and government bond ETFs? I am limited to the UK market.

    Many thanks – Index

  7. Index says:

    Hi Andrew,

    Many thanks. I’m struggling to conclude on the bond element of my planned USD portfolio. Can you suggest any short duration corporate bond and government bond ETFs? I am limited to the UK market.

    Regards – Index

    • What’s your nationality? What exposure are you looking for? Are you interested in a global bond index? If you can’t find a short term bond index, go broad, such as IGLO, iShares Government Bond Index.

      Cheers,
      Andrew

  8. Index says:

    Andrew

    Thanks. I’m British but unlikely to retire in UK.
    I am inclined to go with CORP and IGLO (and perhaps a bit of HYLD) but wondered if SDIG and IBTS might be better given their shorter durations.
    Your views would be appreciated.

    Regards – Index

    • Index,

      You want U.S. bonds? Those ETFs (the two that you listed last) track U.S. companies, which pay bonds in USD. If you are going to live in the U.S. one day, I get it. Otherwise….

      Cheers,
      Andrew

  9. Index says:

    Got it Andrew, thanks. I will go with CORP and IGLO.

  10. Mark says:

    Hi Andrew,

    I recently read your book “An Expat Guide to Investing” and was wondering if you could recommend something specific to my case (and hopefully that will help other readers).

    I have 2 young daughters, aged 10 and 7 and am thinking towards their University education. I would like to start a medium term portfolio which I can withdraw funds from in roughly 8 years to help pay for my daughter’s education.

    In your book, you talk a lot about long-term investments, but I’m not sure what kind of portfolio to build if I want to withdraw lump sums in the medium term and maintain whatever is left for retirement.

    • Hi Mark,

      I can’t recommend anything without knowing your nationality and the currency with which you will be paying that tuition.

      Cheers,
      Andrew

      • Mark says:

        Hi Andrew,

        Thanks for the reply. I’m a British Citizen living in Vietnam. I have just applied for a trading account in Singapore which gives me cheap access to the Singapore, HK and US markets.

        The plan is, at the moment, to send my kids to University in Europe as I am hoping to move to the EU within the next 6-8 years.

        This is far from certain though and ideally, I’d like the option to send my children to the university of their choice, anywhere in the world.

  11. Mark says:

    Thanks Andrew,

    That makes sense. I was considering putting 33% into VGTSX, but more focused on US bonds as I am paid in US dollars and view Asia as my fallback position.

    For the Euro Corporate bond, and a 50GBP minimum commission with Vickers, I’ll look into it and also figure out how frequently I should/could purchase.

  12. Zori says:

    Do you have recommendations for Mexican nationalities in your book?

    • Hi Zori,

      What country do you live in? Are you a Mexican national living overseas?
      Andrew

      • Zori says:

        Andrew, I am Mexican/Russian living in Colombia currently. I have an account with TD Ameritrade but concern about estate tax and would like to optimize tax as well.
        I already got your book 🙂

  13. Bradley says:

    Hi Andrew,

    I have read your books and really enjoyed them and totally buy into the principle. I have managed to bat off the various guys from DeVere and the like who rock up with big smiles, shiny illustrations and huge fees hidden in the small print. Despite getting the theory, I am in analysis paralysis and need a kick up the backside please!

    I am a British citizen, but resident in the UAE, aged 41. I have a TD Direct account set up and ready to go in Luxembourg. I have £175k sat doing nothing (well, 0.55%) in a savings account in Jersey. My monthly savings are about £6500.

    My plan, in an ideal world:
    1. Be mortgage free in another 18 months at current savings rate, on 2 houses I have in the UK. (One is rented, the other is a holiday home. Plan when we return to the UK would be to sell both and buy a family home). Being mortgage free would give me piece of mind in a volatile employment climate.
    2. Save approx £150k for university fees. I have kids aged 7 and 9, so around about 9 years to go on that one.
    3. Save approx 300k as a pension, to go with existing government pension I receive.

    Total time for all that would be about 8 years. The risks I face are being made redundant quite swiftly, and having to re-jig all those plans! I feel planning for a long term horizon and having the rug pulled out from under that plan might be costly.

    How would you suggest I build a low-moderate volatility portfolio that best caters for my situation? Hope for the best, plan for the worst, expect the unexpected etc… I was thinking 60%VWRL, 40%VGOV.

    My final question is regarding tax from the IRS in the USA. If I were to buy, say, CSPX (iShares core S&P 500 UCITS ETF), given that it is domiciled in Ireland, through TD Direct in Luxembourg, and I am resident in the UAE, would my heirs have a tax bill to pay? I find getting sound investment advice and knowledgable tax advice next to impossible.

    Thanks in advance, I really appreciate your books and wish I had cottoned on many years ago. My children will not be so financially bereft; thanks to your books, I plan to educate them! Any advice would be much appreciated.

    Kind regards,

    Bradley

    • Hi Bradley,

      If your ETFs are not domiciled in the United States, your heirs will not pay U.S. estate taxes. None of the ETFs listed in my book for non-American expats are domiciled in the United States.

      As for the other questions, they aren’t really answerable with a clearly defined right or wrong. If you think you could lose your job at any time, you may want to pay off your houses. That’s what I would do. But that’s not what everyone would do. We all have our different risk tolerances and priorities.

      Most would agree that your lowest priority should be your children’s education costs. They can find lower cost places to get educated. Plus, as the counsellors at my old school used to say, they can always borrow money for their education. You can never borrow money for your retirement.

      Cheers,
      Andrew

      • Bradley says:

        Hi Andrew,

        Sorry for the delay in replying. Wise words as ever. I think my plan just firmed up. I shall keep enough cash reserves as an emergency fund, but invest for the long haul. Thanks again, Bradley.

  14. Anton says:

    Hi Andrew
    My name is Anton, a Canadian working and living in South Korea.

    Wanted to add a bit to the story and talk about the research I did in my free time especially after reading the book and realizing many brokerages are, as you mentioned, so different now.

    Surprisingly many of the brokerages that used to accept Korean residents, stopped doing so, including Saxo. Although a few still do (DBS Vickers, TD International). However with the added fees in most of them, it’s become a bit of a hassle

    I think a new investor, e.g. a new teacher who just read your book, will find it exceptionally hard to invest now because many of the brokerages mentioned now charge what the call a custodian fee. In most cases the fee may not seem like a lot, but since it could essentially eat a chunk of that investment over time, it may scare a lot of people away from trying.

    Saxo is the worst offender as you mentioned in one of your previous posts. 0.12% on a million is a nice 1200$ trip somewhere I’m not going to take anymore for example.

    On the other hand, I noticed there are a few US based brokerages that started to accept traders from overseas.

    Now being in Korea and paying Korean taxes, my capital gain tax is non existent as long as I own less than 3% of shares in a company I invest in (I really wish I owned that much, maybe one day…), so opening a US based brokerage account that allows me to trade there is actually kind of excellent.

    The one I settled for is Interactive Brokers, although not sure if they’re currently the best choice. They do have a monthly fee of $10 until a certain amount is reached, but it’s way better than 200 that I’d be paying in TD International or higher than that with both Saxo and DBS.

    My only concern is of course the Estate Tax, so I’m trying to find a way to have the money domiciled in Hong Kong, although I think currently there’s no way as they only allow that for Singapore or Chinese customers.

    But I guess in the future, it may become different.

    A colleague of mine is with TD Intl and is very happy with them, it’s really the customer service that’s just stellar, but Interactive Brokers seems to be almost the opposite. The services are somewhat bad, but the commission fees are very low.

    I am currently paying 1USD for every trade I make every 3-4 months and as long as I don’t really do anything else, I basically limited to 120usd/year charge.

    Other than that, once I figured out how to move the money to the Asian branch of their brokerage, I’ll be a lot more secure in the funds. Not that they’re not secure in the US, but the estate tax is worrying me a bit.

    PS they also have a Canadian chapter, which means that if a person can continue using them after moving back to Canada, however I’m not entirely sure on the process just yet.

    If you know something else about them that I don’t please let me know as I do want to make sure I’m correct in all of this before I start recommending it to my Canadian expat friends

    Looking forward to your new book

    Anton

    • Anton,

      I prefer TD Direct International. With them (unlike with IB) I’ll never have to worry about U.S. estate taxes.

      Cheers,
      Andrew

    • Anton,

      I should add this: to my knowledge, on aggregate, the brokerages that I mentioned in my book for non American expats are cheaper than they were when my book was published. I mentioned on pgs. 180-183 that the custody fee for Saxo would be 0.2% per year. Saxo decided to lower that to a much more reasonable 0.12%. TD Direct International also lowered its custody fee from 0.2% per year to a comparatively negligible quarterly fee. For these reasons, I believe the climate for non American expatriates is more encouraging today, not less encouraging.

      Cheers,
      Andrew

  15. Patrick says:

    Hi Anton and Andrew

    This is exactly the dilemma I found myself in based in Indonesia.

    When you take into account that where I am based that I’m unable to open with TD Direct, that IB exposes me to Estate Tax (and it looks an incredibly complicated platform) Saxo actually is the better option. Even with the 0.12% custodian fee.

    There is a $160 SGD fee per investment (ETF) charge if you want to transfer eventually out into say TD Direct say if I moved to Singapore. However, surely there is a way around this whereby I cash out, close the account and then reinvest all into a newly opened TD Direct account and mirror the ETFs I had with Saxo?

    What’s more is that there is a fee with IB if there isn’t any activity in any given month. I’m planning to save/invest on a quarterly cycle so this bothered me. Having done the maths even though there are higher fees to trade with Saxo there is no charge for inactivity so this balanced out. I’m not going to be heavy trading, just into 3 to 4 ETFs every quarter.

    There was the grip of needing around 10k$ SGD to open a base account with Saxo but they’ve lowered that to 3k$ SGD starting balance which helps.

    So, having done the research and weighed up the risk of Estate Tax and the complicated platform of IB I’ve decided to proceed with Saxo.

    Unless I’m missing something it feels to be the right thing to do…I hope.

    Patrick

    • Patrick,

      You aren’t missing anything.

      In addition, these fees that we are talking about here are incredibly insignificant. More likely (if you are like most people) you will lose about 2% per year to behavior. Most people do. Instead of worrying about paying pennies in fees (and we really are talking about very small sums) you and Anton need to focus on saving a lot of money and maintaining an iron clad will to follow a solid investment strategy. Most index fund investors can’t do that. When markets go haywire, they freak out. Or, as one of the other readers who posted today is tempted to do, they switch for “better performing” stock or bond ETFs. Your behavior will have the biggest bottom line impact on your performance–not the tiny fees we have been discussing in this thread. Here’s an example of what I’m talking about. https://assetbuilder.com/knowledge-center/articles/are-some-financial-advisors-worth-their-fees

      Best of luck.

      Andrew

      • rick says:

        For those of us from Europe, an interesting and cheap alternative is DeGiro, available to any european with an IBAN Number.

  16. Patrick says:

    Andrew

    As always thank you. Great encouragement and coincidentally your books arrived today!!!!

    I should be setup to start everything by next week.

    I’m not too confident in terms of playing around with investing so I’m more than happy to not freak out and plug away as per your book’s instructions for the foreseeable future.

    I’m just incredibly thankful I came across your advice and boos before I went with one of those active advisors.

    Thanks again, I’ll let you know how it all goes.

    Cheers

    Patrick

    • Patrick,

      You’re welcome. Just remember that you shouldn’t want to see markets rise if you’re still adding money. That’s the tough part. You can’t measure this process’ success until you’re many years into your retirement. That’s what makes the process so psychologically hard. You might find this interesting: https://assetbuilder.com/knowledge-center/articles/why-young-investors-shouldnt-want-stocks-to-rise

      Cheers,
      Andrew

      • Patrick says:

        Slightly off topic, but I’ve been looking through your book and your blog and can’t find a point of view on it. The question being as a 35 year old with a working wife and no mortgage should I throw all potential money into my investment portfolio vs syphoning some into Life/Medical Insurance? It’s a question I can’t seem to find an answer for.

        • Patrick,

          That depends on what you mean by medical insurance. If it’s a product that mixes investing with insurance, don’t touch it. If you need currency health care insurance, then of course, buy health care insurance.

          If you buy life insurance, only buy “term” insurance.

          Cheers,
          Andrew

  17. Patrick says:

    Fantastic. Thank you

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