In the last few years, there has been a proliferation of FinTech platforms being launched for investors in Singapore. A number of these platforms offer convenient and affordable use of investment opportunities that were previously not directly available to retail investors. These FinTech information mill able to provide such offerings at a lower cost through harnessing the power of technology.
Technology allows many start-ups to produce their own investment platforms, because both versions 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. If you are not familiar with the company, LU Global is part of the Ping An Group, which ranks 7th on Forbes' 2021 'Global 2000' list.
Clearly, if you would like confidence that you are investing your hard earned money with a large, global organisation, LU Global would pass the exam with flying colours. But besides picking an investment platform merely because of the size the company behind it, here are a few factors Singapore investors ought to consider before they choose 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 appear at are the types of investments that are offered. Does the platform offer products that are not easily available elsewhere?
While they are plenty of robo-advisor platforms today that may 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 items that are similar to what is being offered to personal banking customers in a bank. Included in this are 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 Kind of Investors That LU Global Appeals 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 therefore are typically only offered by banks to their private banking clients. They also tend to be more complex and are generally not available to retail investors.
LU Global is really a self-directed investment platform. What this means is that unlike typical robo-advisers, which may automatically invest your money in line with the risk level that you are prepared to accept, you will always have full treatments for the investments that you are making through LU Global. You decide which investments you wish to buy and also the investment time horizon that you prefer.
This means that LU Global would appeal to more experienced and sophisticated investors who're already familiar with making their very own investments in these asset classes.
It's worth noting that in Singapore, LU Global happens to be only available to accredited investors.
# 3 Costs
One of the main draws for many FinTech platform has been able to pay a lower cost for the investment. In this regard, LU Global is no exception.
Despite offering products that are typically only provided to private banking clients in a bank, LU Global charges an exceedingly low cost. For fixed term products, investors do not pay any subscription fees for buying through LU Global. For many other mutual funds on the platform, investors only pay a one-time fee of US$25. This really is comparable to how much you'll be spending money on 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 offers you with additional support that you could enjoy. For a start, the app (that is free to download) contains a comprehensive 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 from the disadvantages of investing in longer tenor closed-end funds may be the liquidity risk, where investors may be worried that their investments are secured and they can't access the money for other purposes if they need to earlier than expected.
To address this need and supply additional options for investors, the LU Global app provides a platform called Marketplace, which allows investors to sell selected LU Global fixed term funds with 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 undertake 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, for example Malaysia, Philippines and Indonesia, LU Global is available to all retail investors.
If you are interested to start investing using LU Global and therefore are already an accredited investor, you will discover more about the company on its website, in order 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.