BetaSmartz, a business-to-business automated investment platform headquartered in Singapore, has opened an office in Hong Kong from which to run sales and servicing.
Two US-based fund managers are already live with BetaSmartz, founder John James told AsianInvestor by email. He added that two further fund firms are set to onboard soon in Hong Kong and Australia and that the platform is preparing to pilot with an Asian institution. James declined to name any of the firms in question.
BetaSmartz offers, on a white-label basis, hybrid digital investment or so-called robo advice that combines automated and face-to-face financial advice for institutional and retail investors.
Zak Allom, who joined as Asia managing director in January, will run the Hong Kong office as its sole member of staff initially. BetaSmartz has six staff based in Singapore.
Allom most recently worked for executive search firm Tardis Group in Hong Kong as global head of asset management and before that covering asset and wealth management at another recruitment firm, Kinsey Allen International.
The new office will help companies seeking robo-advice solutions to launch or extend their businesses in Asia, BetaSmartz said in a release seen by AsianInvestor.
“We do not use pre-defined or pre-allocated portfolios, so we do not require relationships with managers as such," James said, when asked how many managers would be on the platform at any one time. “Each investor portfolio is unique and allocations to fund managers and their funds is agnostic and are made based on which best represent a given investor’s objectives and risk profile.”
BetaSmartz, even so, does have clients that want to see specific managers on the platform and as a result has forged relationships with global fund managers to provide model portfolios for those clients.
The company uses active and passive funds – including traditional and alternative products – to create portfolios offering exposure to any market worldwide.
“Geographical allocation is agnostic and based on an investor’s risk profiling,” James said. Investors can also add constraints to increase or decrease their exposure to a given geography.
Some industry observers, such as research house Morningstar, have argued that robo advisers will struggle to succeed unless they can achieve scale quickly. James said that partnering with the likes of private banks would allow BetaSmartz to do that.
There are other issues that robo advisers face, such as that know-your-customer rules in Hong Kong and Singapore prevent the sale of, for instance, US-listed exchange-traded funds. But not BetaSmartz, according to James, because the firm does not sell directly to retail investors.