Can we invest like professionals?

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Can we invest like professionals?

Published: Tue 19 Sep 2017, 3:28 PM

Last updated: Tue 19 Sep 2017, 10:03 PM

In the last few weeks, there has been an increasing level of cross-pollination of Fintech related activity between the UAE and other hubs like London and Singapore. Talent that has been incubated under the guidelines of the FCA in the UK, European Central Bank and the MAS in Singapore is finding it increasingly attractive to work with the Fintech Hive in the DIFC and the Reglab at Abu Dhabi Global Market.
Another interesting perspective on Fintech in the UAE is the synergistic value being created by the FinTech Hive at DIFC in bringing together banks, mentors, investors, startups, technology companies, regulators and subject matter experts.
Weinvest, a finalist at the Fintech Hive at DIFC, began its journey in Singapore. Bhaskar Prabhakara, co-founder and CEO, has a rich background in Wealth Management. An alumnus of the elite Indian Institute of Technology, Madras and the Indian Institute of Management, Ahmedabad, Prabhakara began his career as a traditional banker with the unique claim of developing a product within the first nine months of his tenure. Soon, he realised that his passion lay in cutting edge technology and entrepreneurship.
He then joined Mphasis and worked with it's founder, Jerry Rao, a well-known banking and products guru. The next few years with Mphasis & Headstrong brought Prabhakara into close contact with leading wealth and investment management firms which were looking to transform how the Capital markets & asset management industry was run. He worked with leadership and senior executives at Goldman Sachs, CMC Markets, Charles Schwab and the Malaysian Stock Exchange to name a few.
One thing continued to bother Prabhakara. While he and his wife, a banker herself, had progressed from aspiring affluent to affluent and onwards, they had a problem with the quality of financial advice provided by relationship managers (RMs) and wealth bankers. The industry hadn't changed materially with advice being inconsistent in quality and narrowly focussed on a small suite of products that the bank dealt in. There was an inherent conflict in the relationship manager based advisory model.
Weinvest started as an idea to solve this problem by leveraging automation and artificial intelligence. It took conceptual form on 2014 and launched in 2015. They had two key pegs on which he built the concept: People need a simple investing experience, oriented towards their personal goals. Not every investor is comfortable or savvy enough to make decisions on which investment opportunity to buy. The second was that managing investment need discipline, and hence systematic advisory strategies based on quantitative modelling are essential to help investors. WeInvest began its journey as a comparison website, focused on helping fixed deposit, funds and real estate investment opportunities. Seeing the revenue challenges with comparison websites, Prabhakara moved towards a consumer facing automated self-service advisory model. This model presents itself via extremely user friendly Web and Mobile interfaces.
Looking at the high client acquisition costs incurred by Wealthfront and Betterment (US based online investment advisory services), Prabhakara steered towards a B2B model. The BFSI institutional client has the choice of adopting the Weinvest model on a revenue share basis. The institutional client can offer their clients a self-service option or an RM assisted option that links up individual objectives and risk profiles with key strategies from the big names in the industry.
Weinvest looks at three personas of customers. What the company calls "Novios, Monas and Savios". Each represents a certain need-driven behaviour based on career-stage and wealth needs. The other factor that Weinvest considered is the high-level of discipline required to participate actively investing. The third area was whether the end-user wanted a self-catering or an administered model. The fourth area considered was to enable investors to set goals - children's education, retirement planning, home, etc.
The Weinvest provides options for each combination. So you could be a novice who would like to learn hands-on, go through the discipline of doing the research and execute the order yourself. On the other hand you could be too caught up with your daily routine and instead just leave your portfolio management to your bank's relationship manager. In all cases, Weinvest ensures that the quality of advice remains consistent and at levels that were reserved only for the most affluent customers. Once the investor reaches his or her goal objectives, they can create portfolios on themes that they understand - as diverse as biotechnology or candy manufacturers for example.
Also, unlike other investment channels, Weinvest creates a Discretionary Managed Account per end-investor with the Custodian e.g. Pershing, All Funds and Saxo. Which means that all securities and investments are not mingled with other investors. Each investor's portfolio is treated uniquely.
WeInvest benefits both the institutions and ultimately their end-customers by helping them gain access to a simple, transparent and low-cost investment solution without the complexities, cost pains and technicalities of access investing services. Seamless, hassle-free interaction is achieved through a customizable state of the art technology platform which can go live in under 6 months.
This is truly a much better way of planning for one's financial future based on set goals and objectives. Wishing the Weinvest team all the best.
The writer is founding partner at BridgeDFS, a bespoke digital financial services advisory firm (www.bridgeto.us). Views expressed are his own and do not reflect the newspaper's policy. He can be contacted at sanjiv@bridgeto.us.
 

By Sanjiv Purushotham

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