Online securities trading company 8 Securities has launched 8 Now!, Asia's first automated asset allocation service that makes portfolio management and global asset allocation services available to the mass retail market.
At the heart of 8 Now! is proprietary trading technology developed in-house at 8 Securities that constructs and automatically rebalances portfolios of select exchange traded funds (ETFs), including those from the world's largest asset managers and ETF sponsors, to provide a customized and globally diversified portfolio at a fraction of the cost charged by banks and brokerages.
"Information technology is changing our lives, including our financial lives, by bringing mobility, simplicity and value to the way we save and invest," said Mathias Helleu, 8 Securities' executive chairman and co-founder. "8 Now! uses information technology to offer a radically new approach to investing while preserving the best ideas about portfolio allocation, rebalancing and long-term, low-cost investing. It empowers the individual investor and provides an alternative to expensive advisory services, potential conflicts of interest and attempts at cross-selling other products that exist at most banks."
Automated investment and asset allocation services have grown in popularity in recent years in the US and Europe. Similar services have accumulated over US$14 billion in assets in a very short time. The amount of assets managed by automated services is projected to exceed US$255 billion globally within five years, according to independent research.
"The rising level of investible assets in Asia will increasingly be managed 'digitally' online or on a smart phone, especially as a younger generation in the region takes responsibility for managing family wealth and assets," said Mikaal Abdulla, 8 Securities chief executive officer and co-founder. "However, financial institutions have not evolved to meet the new demands of this next generation of investors. That's the role we and other 'digital financial' service providers hope to fill."
8 Now! constructs portfolios based on a customer survey that assesses an individual's investment time horizon and risk tolerance. The customer is presented with a personalized portfolio of up to 16 ETFs selected by Morningstar. The portfolio is diversified across geographies, asset classes and industry sectors, and is automatically rebalanced based on changing market conditions, at no additional cost.
8 Now! customers choose the amount they want to invest starting at US$10,000, a much lower threshold than traditional wealth management services available in the market. The only applicable fee is an annual fee of 0.88% of the customer's total portfolio size. There are no commissions, management fees or hidden charges. Customers can monitor the performance of their portfolio 24 hours a day, 7 days a week via their PC or mobile device.
