Author: Tronserve admin
Sunday 19th September 2021 09:35 PM
Ant Financial, Vanguard Target 900 Million Users with Robo-Adviser
The joint venture between The Vanguard Group and Ant Financial Services is rolling out a new robo-adviser to target the Chinese fintech giant’s 900 million users, a first step in winning a slice of the nation’s fast-growing asset management business.
Their venture started offering an automated service called Bang Ni Tou, which translates as “Help You Invest”, to capture people with at least 800 yuan (US$113) to place in mutual funds, the companies said on Thursday.
“What we do is help users select an entire football team, instead of just one player,” Peter Zhang, chief executive of Vanguard Investment Advisers (Shanghai) Investment Consultancy Co, said in an interview. “We help our users by selecting a portfolio of investments that generate long-term returns.”
While the coronavirus outbreak has rocked the Chinese economy, the nation is proceeding apace with the further opening of its financial industry this month. Foreign asset managers are now rushing in to establish a foothold in a retail funds market that could grow to US$3.4 trillion by 2023.
Ant Financial, controlled by Alibaba Group Holding founder Jack Ma, is a US$150 billion juggernaut that operates everything from payments to money market funds and credit scoring. Alibaba is the parent company of the South China Morning Post.
The new joint venture – in which Ant Financial holds a 51 per cent stake and US investment adviser Vanguard 49 per cent – has been approved by the China Securities Regulatory Commission.
Its robo-adviser will recommend a portfolio selected from 6,000 mutual funds, after assessing the user’s risk appetite and investment horizon. The transactions are done automatically and the robo-adviser will also help investors rebalance their portfolios if necessary.
Users can access the service through the payments app Alipay and Ant Fortune, a wealth management platform.
Clare Zhao, the general manager at Vanguard Investment Management (Shanghai), said the company’s main work with Ant Financial is to create a service that is as easy to use as possible.
The company has hired multiple dozens of people, according to Zhang, who declined to be more specific on hiring and divulge revenue and user targets. The robo-adviser charges a 0.5 per cent management fee, with Ant Financial and Vanguard splitting the profit based on their stakes in the venture.
China’s robo-advisory market is expected to reach 737 billion yuan by 2022, according to a report by Lufax and consultant iResearch. Traditional financial institutions and a slew of fintech start-ups are gearing up to grab market share, including state-backed giants such as Industrial and Commercial Bank of China and China Merchants Bank, according to the report.
In addition to Vanguard, Ant Financial also partners with other international asset managers, such as Fidelity International, Schroders and UBS Group. Currently, these companies mainly work through Ant Financial’s Caifuhao, an artificial intelligence-powered corporate account on its wealth management platform, to provide customised investor education.
Ant Financial, headquartered in Hangzhou, capital of eastern China’s Zhejiang province, plans to work with more international financial institutions in the future, the company said in a statement.
Vanguard serves 30 million investors globally, managing US$6.2 trillion of assets as of January.