SoftBank-backed wealthtech platform secures additional $5m funding

A former executive at investment company UBS, Gregory Van sees that there are two points of systematic misalignment in how financial advisors give advice to their clients.

First is the trailer fee that advisors can get from the product provider. According to Van, this fee encourages advisors to show only the products that can give them the highest payout, leaving others unnoticed.

Second, financial advisors can also get sales fees from every transaction they help close. Thus, they tend to promote products with fluctuating prices so they can push clients to switch to other products from time to time.

Endowus chief executive officer Gregory Van (left) and chief investment officer Samuel Rhee / Photo credit: Endowus

Van looks to solve these issues through Endowus, a fee-only financial advisory firm he helped establish. The company allows its clients to invest not only their cash but also their Central Provident Fund – a kind of pension plan in Singapore – and other supplementary retirement scheme savings. However, it doesn’t charge sales fees and will rebate every trailer fee that clients incur.

Currently, it manages S$1 billion (around US$744 million) worth of assets in Singapore and aims to double the amount by the end of the year.

In April, it secured S$23 million (around US$17.1 million) in a series A round led by Lightspeed Venture Partners, with SoftBank Ventures Asia also participating. More recently, it got another S$7 million (around US$5.2 million) from UBS’ investment arm UBS Next, Samsung’s investment fund Samsung Venture Investment Corporation, and Singtel Innov8 in an extension of the round.

According to Endowus, as a global wealth manager, UBS will be its strategic partner while Samsung and Singtel Innov8 can help extend its reach with the former’s mobile technology expertise and the latter’s access to the Singtel Group.

Combining experiences from UBS and Grab

The idea to build Endowus came to Van when he was still working at UBS. At the investment bank, his job was to give advice and help private equity and venture capital firms fundraise and plan for the future through investing in expensive assets.

“I’ve always wanted to do it myself (investing in expensive assets), but the option was not available,” Van tells Tech in Asia. He then stuck to low-cost portfolios such as stocks and bonds.

When he moved to Grab in 2015, he helped the company build its payment service GrabPay from the business side. He managed early contracts between the ride-hailing company and companies such as Stripe and Adyen, as well as pawnshops in the Philippines and retail stores in Indonesia.

According to Van, Endowus is a combination of his experiences in those companies. “I want to give clients access to the same products and the same systematic advice [as those that are available through an] investment bank, but at a much lower cost and technology help,” he says.

See also: The key players in Singapore’s thriving fintech space