Endowus’s fee-only business model removes all commissions traditionally paid to banks returns them to the client as cash back. This should reduce the cost of investment and enhances the returns by the same amount.
“This is unlike most traditional and digital players in the industry that impose high subscription or transaction fees, which may create the incentive to churn investments,” said the firm in a statement.
“Furthermore, trailer commissions from investment product providers may also create a conflict of interest whereby financial advisors may recommend high commission products to their clients.’
In developed markets such as Australia, the UK, Switzerland, parts of the European Union, and the US regulations have already banned such commissions. Endowus aims to extend the model in Hong Kong and Singapore, where it has crossed $5bn in group assets, according to the firm.
The bi-lingual app allows investors to access custom-built portfolios after gaining an understanding of their goal-based needs, and also for experienced investors who prefer to invest directly in single funds or build their own multi-funds portfolios through Endowus Fund Smart, an independent mutual funds platform.
“Through our proprietary investment technology, we are not only able to enhance the digital wealth management experience, but also democratise access to investment opportunities that were previously out of reach for many,” said Gregory Van, co-founder & CEO of Endowus in a statement.
Endowus Flagship Portfolios, already available in Singapore, will also be accessible in Hong Kong in May.
The portfolios have been curated with globally diversified funds, with different options to different risk tolerance levels and investment horizons. Mutual funds include those managed by Amundi, BlackRock, Dimensional Fund Advisors (previously only available to institutional and some high net worth individual [HNWI] investors), and Pimco among others.
The new Fagship Portfolios are discretionary portfolios, and are managed by the Endowus Investment Office, a twelve-person regional team with institutional backgrounds, who focuses on the curation of best-in-class building block funds, optimised portfolio construction, and ongoing performance monitoring.
The enhanced Endowus app also has new capabilities for professional investors in Hong Kong, including instant access to investments in semi-liquid and liquid private equity or private credit funds and hedge funds at lower minimum size.
This allows “self-directed” professional investors to invest directly in hedge funds offerings managed by firms such as Millennium, Point72, and Balyasny. Endowus’ private market shelf includes private equity and credit funds from Carlyle, EQT, KKR, and Partners Group, many of which are traditionally reserved for HNWI, available only through relationship managers or financial advisors in priority and private banking segments.
Endowus is a leading independent digital wealth platform in Asia, with entities licensed by Securities and Futures Commission of Hong Kong and the Monetary Authority of Singapore.
Founded in 2017, Endowus has raised $95m in funding from investors including UBS Next, Citi Ventures, MUFG Innovation Partners, EDBI, Lightspeed Venture Partners, Prosus Ventures, Samsung Ventures, SBVA, Singtel Innov8, and Z Venture Capital. Other investors include Asia family offcies, as well as the founders and employees of Endowus.
