The firm claims its robo-investing service, in conjunction with Morningstar, will create and automate a professionally-designed portfolio at a fraction of the cost levied by banks and investment advisors.
“Today, holding a global diversified portfolio in Asia is complicated and expensive,” Mathias Helleu, executive chairman told FundSelectorAsia.
“[Robo advisory services] are going to be a very powerful theme in Asia as you have an access to a global portfolio at a low [initial investment] with no fees to get in and out. You can easily monitor investments on your phone,” Helleu said.
Automated investment services are seeing an increasing demand in the US and the trend is likely to catch on in Asia too, he said.
“What have the options been for an individual who wants to invest in their future? Either they have a savings account earning virtually no interest or they are paying extraordinarily high fees to a financial advisor,” Helleu said in a statement.
“We believe that the time has come to shake up an outdated system that’s all too happy to create complex products to justify their inflated fees.”
Shift to online channels
Asia has about $50trn in investible assets and there has been a “dramatic” shift of wealth from traditional to online channels, according to Mikaal Abdulla, chief executive.
“However, financial institutions have not evolved to meet the new demands of young investors such as mobility, simplicity and value. While older investors may prefer to use a bank or traditional advisors, the next generation of wealth will be managed on a smartphone,” Abdulla said.
Robo-investing began in the US, where it has traction. The firm said robo advisers such as Wealthfront and Betterment have accumulated over $14bn in assets “in a very short time” and most are demonstrating over 100% annual growth.
Currently only ETFs are offered under the robo advisory service, but the firm has plans to include other financial products, Helleu said.
Investors accessing the service have to complete an online survey to assess their investment time horizon and objectives. Investors are then presented with a personalised global portfolio of ETFs, which Morningstar designs and modifies.
Minimum investment is $1000.
The annual fee is 0.88% of the total portfolio size and the firm claims no other conventional fund charges are levied.
The 8 Securities group was founded by Helleu and Abdulla in 2011. Prior to starting the company, the two founders managed E*TRADE Financial Corp.