Increase in demand for wealth management services.
During the Movement Control Order (MCO) period, it was not just online retail shopping for products and food deliveries that saw an upsurge.
Wealth management fintech platform iFAST has seen more than 10% increase in the volume of online transactions.
These mainly comprise unit trusts and discretionary portfolio management services where buy and sell decisions are made by a portfolio manager.
With interest rates getting lower these days, more investments into unit trusts are expected.
Besides the high liquidity that unit trusts provide, they are also available through a wide selection of funds, at a lower cost of investment and a high transparency fee model.
Under its expansion plans, iFast will be hiring at least 15 new IT specialists who will include JAVA and software developers, as well as people with product development experience.
iFAST also plans to expand its wealth management products and services, and enhance its IT and system capability.
During the MCO period, iFAST Global Markets (iGM) has seen a new segment of customers aged 35 and above; its client base ranges from professionals, business owners and people in senior management.
Unit trusts remain the most popular products in iFAST, with offerings of more than 600 funds from 31 fund houses, across different geographical sectors, risk exposure and currency classes.
“With this MCO, more people are likely to think again whether they have sufficent cashflow or reserves, to sustain an unprecedented crisis or emergency,’’ said iFAST Malaysia CEO Dennis Tan.
“Apart from direct investing, they can talk to a licensed professional on risk diversification for their money, while our financial advisory team can perform transactions through our online portal or mobile apps.’’
As lockdowns are gradually eased, iFAST sees opportunities with long term capital growth in Asia ex-Japan and emerging markets where fundamentals are quite solid and valuations are relatively attractive.
“We are tactically overweight on the greater China region especially on A-shares, as we view that fears were overblown in the recent market corrections amidst the coronavirus outbreaks,’’ said Tan.
Bonds should still be important in building portfolio resilience, even at lower yields and and valuations which are at a slight premium.
With policy rates expected to head lower, bonds with longer maturities and yields from Asian, emerging markets and the local fixed income segment, are preferred.
In a low interest rate environment, bonds provide a fixed income stream and can be a good replacement for fixed deposits.
Risk assets aside, capital preservation, building a balanced portfolio and seeking risk-adjusted returns, is important especially when the global economy is at an inflection point.
iFAST has over 40 licensed financial planners and advisers under iGM, the iFAST in-house direct advisory arm.
iGM is growing at a healthy pace, in terms of assets under administration and the number of representatives; it has a presence in Johor Bahru, Penang, Kota Damansara, Sitiawan and Kuala Lumpur, with representatives across different states and Kota Kinabalu.
Part of the iGM structure includes an ‘incubator’ model where wealth advisors are given support from coaching to digital training.
As a wealth advisor’s business keeps growing, he is given the option to run his own firm one day.
Clients’ assets belong to their respective wealth advisors who can bring these assets along with them to their own firms.
iFAST started its business from Singapore which is the regional headquarters, and opened its Malaysian office in 2008 with just a few unit trust funds.
Today, it offers hundreds of not just unit trusts but also bonds, Malaysian Government Securities, insurance products, IT solutions, investment research and administration services.
Its range of investment products and services are offered to financial advisory firms, banks, financial institutions as well as retail and high net worth customers.
Yap Leng Kuen had a respected career as a senior business editor and widely read columnist speaking plainly, for the leading local newspaper. She continues to write Plain Speaking for The Star Online.
I am delighted to share her view points and insights, here.