Singapore-based digital wealth adviser Endowus has launched its digital wealth management platform, Endowus Fund Smart solution, in Hong Kong.
The platform offers more than 140 funds across asset classes, including equities, fixed income, multi-asset, commodities and cash and money market.
It selects products from around 30 global asset managers such as Amundi, BlackRock, Fidelity International, Goldman Sachs, Franklin Templeton, and Morgan Stanley.
It also provides alternative strategies for individuals with portfolios of no less than HK$8m ($1.02m) such as hedge funds, private equity, private credit and private real estate.
Apart from investing in single funds, clients can also invest through multi-fund model portfolios.
Unlike most distributors that receive a trailer fee from asset managers, the wealth manager said it has adopted an alternative business model in which it collects a fee from clients on an asset basis and returns the sales distribution commission to its customers on a weighted average basis.
“The industry practice of paying trailer fees to distributors, like banks and brokers, goes against the ethos of offering products based on the needs of clients and improving long-term returns for investors,” said Samuel Rhee, co-founder, chairman and chief investment officer at Endowus.
“By removing these often hidden commissions, we effectively remove any possible conflict of interest and place our focus solely on serving our clients’ wealth needs.”
The Endowus Investment Office first screens the fund for performance, cost and investment process and then selects the clean share class with no loaded fee on top.
“The umbrella fund is what is authorised for sale in the Hong Kong market, while distributors choose which share class they ultimately list on their shelf. It is no surprise that distributors choose those with the highest fee share class so they can earn the highest commission,” said Gregory Van, co-founder and chief executive officer.
So far, the firm has returned nearly $5m in trailer fees paid and over $15m in total savings.
In October, Endowus acquired a majority stake in Carret Private Investments, a Hong Kong-based wealth manager and multi-family office.
