When wealth management firms start managing their own wealth

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Hello reader,

Just a few weeks ago, I wrote that I found it interesting that firms like StashAway, Endowus, and Syfe – which help users save and grow their finances – can operate at a loss.

Of course, this is nothing new or alarming in the startup and tech world, but with the traditional “profit = good, loss = bad” thought process, it’s just a bit of funny tortured logic to me that a company that isn’t making money itself is tasked with making money for others.

But this may all change soon. Today’s premium article looks at how these wealth management companies are gunning for profitability.

Today we look at:

• How digital wealth platforms are plotting their paths to profitability
• The main reason behind the Tokopedia-TikTok deal
• Other newsy highlights such as the US$100 million funding round of an Indian logistics startup and GudangAda’s insistence that it’s not winding down operations any time soon

Premium summary

Life lessons from wealth management firms

Image credit: Timmy Loen

I suppose the paradox of wealth management firms operating at a loss is a kind of metaphor for life. Everyone is flawed in some form or another, but we keep trying to live our best lives and to help those around us do so as well.

I think that’s a good lesson – as long as these firms actually aim to reach profitability at some point and are not just content to burn investor money chasing unsustainable growth.

• Helping more people: Wealth management platforms StashAway, Syfe, and Endowus saw a bump in their assets under management in 2023, as new product rollouts attracted more commitments, mainly from existing clients.
• Still red marks: While players say business is growing, they have yet to be profitable. For example, financial reports for Endowus show revenue growing 151.5% to S$8.3 million (US$6.2 million) in 2022. However, its losses also swelled 51.4% to S$26.8 million (US$19.9 million) in the same period.
• Doubling down: For 2024, the firms are eschewing expansion plans in favor of concentrating on the markets they’re already in.

Read more: Digital wealth platforms report growing AUM, but have yet to see profits

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A matter of necessity

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