This robo-advisor grows wealth for the young

dubai - Sarwa is the first hybrid investment manager targeting young professionals in the UAE

Ever so often, you receive calls from your bank's relationship manager, proffering wealth management services. However, you politely decline since you perceive wealth management to be reserved only for the rich.

A new company wants to change this notion and make wealth management more accessible to the masses. Sarwa - meaning wealth in Arabic - is the first hybrid investment manager targeting young professionals in the UAE, says Mark Chahwan, co-founder, Sarwa. "We deliver a hybrid model: we help our clients build smart portfolios that grow their wealth, while our financial advisors are available on-demand to guide them and answer their questions."

Chahwan says they have been building the platform for more than a year and identified a market gap for a low-cost and diversified platform to make investments and offer advice. Young professionals in the UAE have lucrative incomes but lack a solution that helps them make the most of their money.

Before Sarwa, they had two options: they either hired traditional wealth managers who charge high management fees but often under-perform their benchmarks or reverted to managing money themselves with a self-directed brokerage account, which is complicated and intimidating for most investors who don't feel equipped to make the right investment decisions.

Such low-cost, automated platforms based on passive investing are very popular in North America and there's no reason why young professionals in the Middle East shouldn't have access to an accessible and proven way to build wealth.

"We are planning to launch by the end of 2017, starting with our early adopters and progressively expanding the platform to the broader market in 2018. Sarwa closed a strong seed round during the accelerator and is currently raising Series A [$2 million to $3 million] to fuel the company's fast growth. Shorooq Investments is leading our seed round. Getting a strategic venture capital investor of this caliber early on is key to scale and become the GCC's leading digital wealth manager," added Chahwan.

Sarwa's customers can sign up online and answer a questionnaire. They will receive a personalised investment strategy. The company then opens an online account using technologies such as facial recognition to make it easy and convenient while meeting regulatory requirements. Clients then transfer money that is used to buy a diversified mix of exchange traded funds.

"We make sure our clients stay optimally diversified as markets fluctuate with automatic rebalancing. They have 24/7 access to their Sarwa dashboards to see how their money is doing. Human advice is also important to our clients, so we offer free, unlimited access to financial advisors and answer their questions," informs Chahwan.

The company is focused on young professionals and digital natives. Around 30 per cent of the UAE's population is aged between 25 to 35 and 94 per cent of them are active Internet users.

"Our customers are technologically savvy and digital addicts. They are disenchanted by the high fees, lack of transparency and poor customer experience of current financial service providers in the UAE. Sarwa's platform addresses the investment needs of both expats and locals in the UAE and solves the pain points that lead consumers to switch financial service providers: price, product and customer service," says Chahwan.

Shane Shin, Partner, Shorooq Investments, said the company believes the business model will disrupt "passive investing strategies" in the GCC.

"The concept of robo-advisors has already changed how millions of individuals invest in the US, Canada and Europe as it presents a cost-effective alternative investment strategy to investing through traditional portfolio/wealth managers. We expect the GCC to follow the same trend. We are confident that Sarwa is on track to become the market-leading robo-advisor platform in the region," says Shin.
Echoing a similar sentiment, Jad Sayegh, co-founder and chief technology officer, Sarwa, said: "Our mission is to empower people to reach their goals faster with expert, affordable investing. Our team understands the industry and the region and is uniquely positioned to democratise investing in the region as quickly as possible."

Accelerator help
A few months after starting the journey, the Dubai International Financial Centre (DIFC) launched the FinTech Hive, the first FinTech accelerator in the Middle East, in partnership with Accenture, the world's largest consultancy firm. The FinTech Hive held a four-month, rigorous application process to filter through 200+ applications and picked Sarwa's team to innovate and deliver a unique investment management platform that will revolutionise and democratise how people in the Middle East build their wealth. The DIFC FinTech Hive allowed Sarwa to reach hundreds of early adopters that have signed up for Sarwa's waitlist on www.sarwa.co.

Sarwa plans to market directly to consumers by the end of 2017.

- sandhya@khaleejtimes.com