The platform differs from a robo-advisor because the portfolio is created manually by Crossbridge with input from Morningstar and it will invest across different asset classes such as individual securities, commodities, ETFs and alternatives, according to Charlie O’Flaherty, the firm’s partner and head of digital strategy and distribution.
Only a small portion of the portfolio will invest in ETFs, according to O’Flaherty.
“We don’t believe in the idea of stacking fees, which is when we receive fees to manage your portfolio but end up paying someone else to manage the ETFs,” he told FSA. “We use ETFs when we need to, when the asset class is difficult to access otherwise, or when the portfolios are small and we don’t have the critical mass to buy individual equities.”
The total fees are capped at 1.25%, while the most conservative type of cash alternatives portfolio charges 0.2%, he noted.
The firm is targeting accredited investors in Singapore, which have more than S$2m ($1.44m) of net personal assets or annual income over S$300,000 ($216,000).
“What we are approaching is the affluent investor space, which is quite a different crowd than what we used to deal with – the ultra high net worth clients.”
The firm believes this segment is underserved, as they are not qualified for private banks, while the service they are getting from banks “tend to be fee-heavy and not client-centric,” he said.
Crossbridge has $3bn of assets under advisory, managing investments for about 120 families in total across offcies in London, Singapore, Monaco and Malta, O’Flaherty noted.
Another underserved space is US expats, which total 27,000 in Singapore but face difficulties opening investment accounts in the city-state, he added.
Various robo advisory platforms sprouted in the Lion City this year, each with slightly different approaches. Bento, launched in October by a Singapore startup, tries to build ETF-only portfolio by automating the product selection process. US-based Hedgeable, meanwhile, is targeting early-stage investors in Hong Kong and Singapore with investments not limited to ETFs, with minimum investment starting $1.
