Why become a professional investor in Hong Kong

What are professional investors?

Most non-professional individual investors, generally known as retail investors, are restricted from accessing some types of investments that are exempt from certain regulatory requirements. 

This is to protect retail investors from the risks associated with such products, which include alternative assets such as private equity, private credit, infrastructure, or hedge funds. These products are generally more complex and have not been authorized by the Hong Kong Securities and Futures Commission (SFC) to offer and market to the general public.

Regulators in different countries have their own definitions of PIs and qualifying criteria, which often include professional experience and net worth requirements. 

In Hong Kong, the Securities and Futures (Professional Investor) Rules define PIs as individuals with a portfolio of not less than HK$8 million, when any one or more of the following are taken into account:

(i) a portfolio on the individual’s own account;

(ii) a portfolio on a joint account with the individual’s associate (being, your spouse and children);

(iii) the individual’s share of a portfolio on a joint account with one or more persons other than the individual’s associate, which is:

• the individual’s share of the portfolio as specified in a written agreement among the account holders; or
• in the absence of an agreement, an equal share of the portfolio; and

(iv) a portfolio of a corporation which, at the relevant date, has as its principal business the holding of investments and is wholly owned by the individual.

The portfolio may consist of assets such as investments (including stocks, bonds, mutual funds, equity-linked investment and more) based on market value, certificates of deposits (CDs), cash or cash equivalent deposits.

If you fulfil the above conditions, you may choose to be deemed as either a professional investor or a retail investor. Investors who choose to be treated as professional investors at Endowus are required to undergo a verification process.  Our client advisors will walk you through the process and the required documents after you indicate your interest. After having upgraded to the professional investor status, you may withdraw your consent at any time, by giving written notice, if you change your mind.

Benefits of being a professional investor

Many investment products are only available to professional investors. These include certain alternative assets such as private equity, private credit, infrastructure, or hedge funds. Having access to a wider variety of investments can help with building a better-diversified portfolio and potentially achieve greater returns.

Endowus has a private wealth arm that provides access to more investment products such as alternative investments, many of which are only available to professional investors.

What to know before opting in as an professional investor

Regardless of your net worth, all investors should give careful thought to all investment opportunities and remember that all investments carry risk. In particular, PI-only products tend to have less regulatory oversight and require a bigger financial commitment upfront, their offering and marketing documents are not subject to regulatory review.

Importantly, being treated as an PI means that you are expected to have more knowledge, and are able to understand and manage the risks of the financial products you choose to invest in.

Professional investors are assumed to be better informed and better able to access resources to protect their own interests, and therefore require less regulatory protection. 

Investors should consult a professional adviser if they do not understand any consequence of being treated as an PI.

With Endowus Private Wealth (EPW), clients looking to invest a minimum of US$1 million in assets across our services can gain exclusive access to more personalised solutions and products.

Let us introduce you to a better way to manage your wealth. For more information or to explore the options available to PIs, please contact us for a consultation.

Click here and get started with Endowus.

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Risk Warnings

Investment involves risk. Past performance is not an indicator nor a guarantee of future performance. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. 

Opinions

Whilst Endowus HK Limited (“Endowus”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies or typographical errors.

Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endowus and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus, its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances.

No invitation or solicitation

Neither the information, nor any opinion, contained in this article constitutes a promotion, recommendation, solicitation, invitation or offer by Endowus or its affiliates to buy or sell any securities, collective investment schemes or other financial instruments or services, nor shall any such security, collective investment scheme, or other financial instruments or services be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction. This is not intended to be an invitation or offer made to the public to subscribe for any financial product or other transaction.

This advertisement has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.