This article was written in collaboration with LU Global. All views expressed in this article are the independent opinion of DollarsAndSense.sg
In the last few years, there has been a proliferation of FinTech platforms being launched for investors in Singapore. Many of these platforms offer convenient and affordable access to investment opportunities that were previously not directly available to retail investors. These FinTech companies are able to provide such offerings at a lower cost through harnessing the power of technology.
Technology allows many start-ups to launch their own investment platforms, each of which aim to disrupt the existing quo by providing a unique value proposition to Singapore investors.
However, small start-ups are not the only ones who are able to leverage on FinTech to launch exciting new investment platforms. Neither is Singapore’s investment market only reserved for local players. As a globally-connected financial hub, Singapore is an attractive place for big overseas companies to launch investment platforms to serve investors here and in the region.
One company that has launched its online wealth management platform portal in Singapore last year is LU Global. For those who are not familiar with the company, LU Global is a member of the Ping An Group, which ranks 7th on Forbes’ 2019 ‘Global 2000’ list.
Clearly, if you want confidence that you are investing your money with a large, global organisation, LU Global would pass the test with flying colours. But besides picking an investment platform merely because of the size of the company behind it, here are other factors Singapore investors ought to consider before they decide to start investing through LU Global.
#1 Types Of Investments Offered
Whenever a new platform is launched, one of the first things most investors will look at are the types of investments that are available. Does the platform offer products that are not easily available elsewhere?
While they are plenty of robo-advisor platforms today that can provide you with access to global ETFs, there are hardly any platforms that are able to provide the types of investments that LU Global offers.
LU Global offers products that are similar to what is being offered to private banking customers in a bank. These include money market funds, fixed income funds, equity funds, real estate funds and private equity funds.
With the LU Global app, which allows investors to manage all their investments, you can sort out the investments you want to see based on your preferred risk level and tenure.
#2 Type Of Investors That LU Global Will Appeal To
If you think some of the aforementioned asset classes (like private equity) are more sophisticated than what you’re used to, you’re not alone.
Some of the funds offered by LU Global are considered alternative investments and are typically only offered by banks to their private banking clients. They also tend to be more complex and are generally not accessible to retail investors.
LU Global is a self-directed investment platform. What this means is that unlike typical robo-advisers, which would automatically invest your money based on the risk level that you are willing to accept, you will always have full control over the investments that you are making through LU Global. You decide which investments you wish to buy and the investment time horizon that you prefer.
This means that LU Global would appeal to more experienced and sophisticated investors who are already familiar with making their own investments in these asset classes.
It’s worth noting that in Singapore, LU Global is currently only available to accredited investors.
# 3 Costs
One of the main draws for many FinTech platform is being able to pay a lower cost for your investment. In this regard, LU Global is no exception.
Despite offering products that are typically only provided to private banking clients at a bank, LU Global charges an exceptionally low cost. For fixed term products, investors do not pay any subscription fees for buying through LU Global. For most other mutual funds on the platform, investors only pay a one-time fee of US$25. This is comparable to how much you’ll be paying for individual stocks on the Singapore Exchange.
# 4 Additional Services You Enjoy
Besides allowing you to make direct investments into funds of your choice, the LU Global app also provides you with additional support that you can enjoy. For a start, the app (which is free to download) contains an extensive list of specially-curated articles that you can read to improve your investment knowledge. LU Global also does due diligence to conduct research and learning on the products that they offer.
# 5 Marketplace
One of the disadvantages of investing in longer tenor closed-end funds is the liquidity risk, where investors may be worried that their investments are locked up and they can’t access the money for other purposes if they need to earlier than expected.
To address this need and provide additional options for investors, the LU Global app offers a platform called Marketplace, which allows investors to sell selected LU Global fixed term funds to other LU Global investors who are keen to take on their investments.
This is similar to setting up of a secondary market where buyers and sellers can release or take on investments at a lower cost from other investors.
For Now, LU Global Is Only Available For Accredited Investors Only In Singapore
Unfortunately, LU Global is currently only available to accredited investors in Singapore. In other regional markets, such as Malaysia, Philippines and Indonesia, LU Global is available to all retail investors.
If you are interested to start investing using LU Global and are already an accredited investor, you can find out more about the company on its website, or to download its app on the App Store or Google Play to get started. You can also apply to be an accredited investor if you qualify for it, but didn’t register previously.