Singapore-based Endowus expands regional footprint with official launch of its digital wealth management services in Hong Kong
UBS-backed digital wealth platform leads industry in the removal of all trailer fees and sales commission charges, while offering institutional share-class products with leading global fund manager partners
Endowus announces today the official launch of its digital wealth management services in Hong Kong. Investors can start building single and multi-fund portfolios via the Endowus Fund Smart solution, offering over 140 best-in-class funds across asset classes including cash & money market, fixed income, equity, multi-asset and commodities. Endowus Private Wealth clients can gain access to alternative strategies such as hedge funds, private equity, private credit and private real estate.
Hong Kong is Endowus’ first overseas expansion market after Singapore. Endowus offers the same value propositions – greater access to best-in-class and institutional-grade investment products, as well as expert advice completely aligned with investors, at a low, fair fee – to its clients here. Backed by some of the biggest names in finance and technology, such as UBS AG, Prosus (Naspers), and Samsung, Endowus is Hong Kong’s first fee-only, non-commission-based digital wealth management platform. The firm does not receive any sales commissions and provides an industry-first 100% cashback on trailer fees to its clients. This allows Endowus to remain independent and conflict-free when serving in its clients’ best interest as their trusted fiduciary advisor.
Gregory Van, Co-founder and Chief Executive Officer, Endowus said, “Since our founding, Endowus has been staunchly committed to making wealth management advice and fund access fairer, more transparent and at a lower cost. We want to empower individuals and families to invest better to live better. While we are still in our early years, the Endowus group has grown rapidly and is entrusted with over US$4 billion in client assets from retail and high-net-worth investors, as well as family offices and institutions.”
Fee-only model lowers costs and maximises investing success for clients
Trailer fees or fund distribution commissions paid by fund and asset managers to distributors such as retail banks, private banks, brokerages and investment platforms, are an industry norm in Hong Kong and across Asia. This potentially leads to the misalignment of interests between an investor and the product distributor, as the latter may be incentivised to offer funds that pay higher commissions over products that are more suitable for the investor. Challenging this status quo, Endowus, endeavours to disrupt the wealth management experience with absolute fee transparency, and a return in the form of cashback to clients for all trailer fees received.
Samuel Rhee, Co-founder, Chairman and Chief Investment Officer, Endowus said, “All wealth management firms including Endowus should uphold its fiduciary duty of putting clients’ best interests before their own. The industry practice of paying trailer fees to distributors, like banks and brokers, goes against the ethos of offering products based on the needs of clients and improving long term returns for investors. By removing these often hidden commissions, we effectively remove any possible conflict of interest and place our focus solely on serving our clients’ wealth needs. Since 2019, Endowus has returned almost US$5 million in trailer fees paid as cashback to our clients, and over US$15 million in total savings, and we will be championing the same practice in Hong Kong.”
Broadening access to institutional-grade investment products across public and private markets
Retail investors in Hong Kong often lack access to low-cost and best-in-class products in Hong Kong. In fact, Hong Kong’s investing costs are one of the highest in the world. The high costs of investing often leads to detrimental investment outcomes and prevents investors from building a broadly diversified portfolio that is resilient to volatility. Lower fees are critical to investment success as a difference of just 1% in fees can amount to over 240% of lost returns over a 30-year period.
The Endowus’ Investment Office adopts a proprietary fund selection framework, SMART+, to rigorously screen, measure, refine and track funds offered on the platform. We partner with top global asset managers including Allianz Global Investors, Fidelity, JP Morgan Asset Management, PIMCO and more. Endowus strives to provide lowest-possible cost access to these best-in-class professional managed investment products. Hong Kong retail clients can, for the first time, get direct access to institutional share class funds that are not typically offered to retail investors, and enjoy up to 3X in cost savings on Endowus compared to similar offerings at retail banks.
“Individual investors have historically not had a level playing field, as large institutional investors get access to better advice and products at a lower cost. Endowus was created to bring endowment-style institutional investing to all of us and provide institutional advice on fund selection, portfolio construction and optimisation by a strong team of talented professionals with institutional experiences. Access at the lowest possible cost to exclusive and trailer fee-free funds in both public and private markets provides a strong foundation in achieving better outcomes for all individual investors. This includes some of our biggest investment goals like retirement preparation. We are excited to bring these exclusive, institutional-grade services to our clients in Hong Kong,” said Rhee.
Endowus Fund Smart expands on investment themes including money market, fixed income, global equity and China, currently offering over 140 curated funds by world-class fund managers such as Amundi, Blackrock, Fidelity, Goldman Sachs Asset Management, Franklin Templeton and Morgan Stanley Investment Management. Apart from investing in single funds, Endowus clients can also invest through multi-fund model portfolios, which are optimised to improve risk-adjusted returns and lower costs by utilising only top-tier funds to construct efficient, multi-manager, diversified portfolios. These portfolios include strategies covering global equities, fixed income, cash management, as well as complementary satellite strategies such as technology, China equities, and megatrends.
Additionally, Professional Investors or PIs can further diversify their portfolios through access to alternatives such as hedge funds, private credit and private equity strategies. Partnering with leading players such as Bridgewater, Carlyle, KKR and Partners Group, these alternative investment products which were previously not easily accessible to individual investors, are offered at lower minimums, no subscription fees and 100% cashback on trailer fees.
Empowering investors through financial education
Endowus believes that individuals can become savvier investors with the support of not just technology that offers a seamless user experience, but also be equipped with solid financial knowledge to make informed investment decisions. Endowus’ Fin.Lit Academy covers a wide range of topics including market updates, investing, personal finance, and retirement. Endowus’ efforts have witnessed incredible reach in 2022, achieving more than 1 million total unique page views for Endowus Insights articles, as well as more than 26,000 hours of view time for live webinars.
Steffanie Yuen, Managing Director and Head of Hong Kong, Endowus said, “Despite being a key international financial hub, it is not easy for individuals in Hong Kong to gain access to professional and independent advice on personal finance and wealth management. According to the latest Endowus Wealth Insights Report, most investors in Hong Kong rely on friends and family as their key source for financial or investment advice. And across all age groups, the most important reason behind why investors feel the pressure to invest more in the coming year, is the need to build a more robust cushion in preparation for retirement.”
Yuen added, “I look forward to leveraging the power of technology to provide Hong Kong investors with a next-generation wealth management experience that is digitally seamless, conflict-free and transparent. We hope to empower them with the knowledge to be able to make good financial decisions and achieve their personal long-term life goals.”