Published by Fund Selector Asia – 4th Oct 2018
Value Partners Technology Systems no longer has its licences in Hong Kong after the regulator removed them last month.
The entity received its licences to conduct asset management (Type 9), as well as dealing in and advising on securities (Type 1 and Type 4), in April last year. At the time, the firm said Value Partners Technology Systems would provide robo-advisory services to wealthy individuals.
Before the entity was established, King Au, Value Partners chief executive officer, said in its annual report that the firm had been building its own robo-advisory platform, but did not give a timeline.
Roger Hepper, Value Partners’ Hong Kong-based chief operating officer, told FSA that the firm never actually activated and used the licenses.
“It’s not a case that one of our businesses has lost its licences and had to be closed. Rather, this was an initiative we explored but decided not to implement during the business assessment stage. As a result, we did not need the licenses.”
Hepper added that the reason for not activating the licences was based on the firm’s evaluation that it is better placed to focus on being a product manufacturer and placing its products with third-party distributors and platforms, rather than becoming a direct distributor.
Separately, Au said in a previous interview last month that firm has scrapped the initial plan of building the platform in-houseand is now in talks with B2B robo-advisory fintech providers.
“We decided to look for other alternatives instead of building that ourselves,” he explained, noting that the firm is still inking a robo-strategy.
“Do we target the mass retail or will we focus on the wealth management segment, where people look at more sophisticated advice modelling or even access to alternative products?” he added.
B2B partnerships
Value Partners’ move to potentially partner with other fintech firms has become a trend in the industry. Other firms, including fund managers and banks, have been forging partnerships or making strategic investments with fintech firms to launch or explore opportunities within robo-advisory.
For example, Franklin Templeton Investments led the funding of B2B robo-advisory firm Bambu in July, according to a statement from the fintech firm.
Last year, Hong Kong-based brokerage firm Convoy Investment Services (CIS) signed up with robo-advisory service firm Aqumon.
Hong Kong IFA Convoy, which is a different entity from CIS, also became the largest shareholder of Nutmeg, the UK-based robo-advisory firm, after a £24m ($31.22m) investment in 2016, according to a statement from the firm at the time.
Singapore-based OCBC Bank, meanwhile, has also partnered with wealth technology start-up We Invest to roll out OCBC Roboinvest in August. The bank claims to be the first of its kind in Southeast Asia to launch a robo-advisory service.
Dominic Gamble, Singapore-based chief digital officer at fintech firm Privé Technologies, previously said that financial firms, and especially banks, are better positioned to offer robo services to clients than start-up, B2C fintech firms.
“The problem for start-up B2C robo-advisory firms is client acquisition, which should not be an obstacle for banks.”
In the US, financial firms such as Vanguard and Charles Schwab have been the real winners with robo-advisory services, he said. Like banks, they already have an existing client base.
