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Wednesday, August 17, 2016, 22:57

Making a wise investment? Let the robotic guru do it!

By Chai Hua

Editor’s note: The robo-adviser business has taken the world by storm, and is projected to grow to $5 trillion in a decade. A Hong Kong fintech startup has come up with Chloe — the city’s first robo-adviser mobile app — that promises to help investors plan their wealth management from day one and realize their goals.

Making a wise investment? Let the robotic guru do it!

Lacking financial knowledge? Don’t know what investment product to buy? No time to manage your portfolio? Don’t worry, robo-advisers are here to help you.

Robo-advisers, or intelligent investment robotic advisers, are designed to allocate, deploy and rebalance investments based on automated computer algorithms.

Last August, the world’s largest asset manager BlackRock’s purchase of a robo-adviser startup, Future Advisor, marked the explosion of the robo-adviser industry.

Citi Group estimates that the value of assets under robo-advisers’ management worldwide amounted to $14 billion at the end of 2014, and could grow to $5 trillion in 10 years’ time.

In the United States, assets under management of Wealthfront and Betterment — two leading players in the robo-advisery business — had surpassed $3 billion and $3.9 billion, respectively, in the first quarter of 2016.

In the third quarter of this year, the SAR will meet its first robo-adviser mobile app — Chloe — developed by 8 Securities, a Hong Kong-based fintech (financial technology) company.

In Hong Kong, research firm Aite Group forecasts that assets held by robo-advisers are expected to expand exponentially — from $400 million this year to $20.6 billion by 2020.

Mathias Helleu, its executive chairman, says Chloe, as a digital adviser, is here to help users along the way from day one to build and monitor portfolios to achieve their goals.

With over a decade’s experience in the online trading business in 14 markets across Canada, Europe and Asia, Helleu co-founded 8 Securities in 2011. The company was named Geek Park’s “Top 50 Most Valuable Startups” at the Innovators Summit in Shanghai this year, selected by top venture capital firms, such as Sequoia, IDG and GGV Capital.

Helleu believes that technology has, in many ways, changed the way people live, and it’s bound to be the next wave of disruption sweeping through Asia’s wealth management industry.

The startup aims to democratize global investing for individuals across Asia, and utilize technology to make growing money simpler, more transparent and affordable, he says.

Chloe’s advisery work begins from asking users about their age, income, saving goals, target date, initial endowment and suitability. A personalized portfolio of up to 10 ETFs (exchange-traded funds) will be presented and users can check their performance any time on the mobile phone.

Cedric Roll, chief technology officer of 8 Securities, says Chloe is a goal-based adviser who will persistently help customers achieve their goal in savings — ranging from buying a holiday package, making a down payment on an apartment, paying for a child’s education to planning your retirement — without unnecessary distractions.

Traditional investment advisers, or brokers, usually present portfolios based on the risk an investor can take — aggressive or conservative, but Chloe just focuses on a user’s goals.

Once a goal is set, Chloe will rebalance automatically according to market movement in a bid to gain enough money to accomplish the user’s targets.

Helleu says users only need to focus on their goals without being bothered by the tedious and sterile mathematics in financial market — “just trust Chloe”.

Powered by artificial intelligence (AI) and machine learning technologies developed in-house, Chloe can learn day by day as its user base and database grow to optimize goal-setting and portfolio matching.

In addition, if a user’s goal is to purchase a house, she will provide details of local house price and provide suggestions when your goal is difficult to achieve.

Based on internet technology, Chloe charges only “a fraction of the cost charged by traditional banks and brokerages”, says Helleu.

Professional asset-management services used to be exclusive to people with high income because of high commission fees, but robo-advisers can substantially cut off service fees, making professional investment consultancy services available to almost everyone.

Users of Chloe need to pay only a service fee of less than 1 percent but no transaction fee, withdrawal fee or any other hidden charges.

Helleu believes everyone deserves the same access to world-class investing as “the big guys”, adding that Chloe provides them with a fully-digitalized alternative to expensive advisory services.

“Chloe treats you the same way, no matter how rich or how poor you are. She gives everybody a chance.” The minimum investment amount with Chloe will be under HK$1,000.

Chloe will be launched in both the Chinese and English versions. Mainland investors with a Hong Kong bank account can also apply to use Chloe as a channel for global asset allocation.

Helleu says 8 Securities is also looking to explore other Asian markets, such as Singapore, in future.
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