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Friday, August 04, 2017, 12:00
Making tomorrow’s ‘Warren Buffetts’
By Duan Ting in Hong Kong
Friday, August 04, 2017, 12:00 By Duan Ting in Hong Kong

HK people with as little as US$800 can now invest their assets worldwide using an app. Yunfeng Financial CEO tells Duan Ting that helping the less well off to manage their wealth is just the start of their fintech blueprint.

Yunfeng Financial Group CEO Li Ting  says the hardworking and dedicated attitude of the Chinese people has contributed to the rapid spread of technology on the mainland. (PHOTO BY PARKER ZHENG / CHINA DAILY)

Forget about having to be a Warren Buffet or George Soros to boast that your wealth is being well looked after and piled up by specialist financial aces around the world — the prerogative can now be enjoyed by anyone in Hong Kong or on the Chinese mainland with a paltry US$800 to spare.

The Alibaba Group of magnate Jack Ma Yun has never ceased to be an ardent player in the great financial tech revolution gripping the universe, with Yunfeng Financial Group, backed by the mainland behemoth, racing to the service of the less affluent by launching Hong Kong’s first 2.0 global robo-adviser mobile app adopting technology to offer tailor-made wealth management services.

“We just want to supplement the traditional finance services rather than being a disrupter in the industry,” says Li Ting, Yunfeng’s chief executive officer, whose credentials include a 14-year stint at renowned global asset management group State Street Global Advisors.

You need to be really fast and accurate, and no one will tell you if you’re going in the right or wrong direction

Li Ting, chief executive officer of Yunfeng Financial Group

She has cast an absolute vote of confidence in the asset allocation business, pointing out that two prime factors in the past two years have reshaped the global investment scene, casting a positive light on the sector — the yuan’s high volatility, along with declining yields of trust products on the mainland — which have made people sense the gravity of diversifying their investments following the stock market collapse in 2015.

Previously, Li notes, mostly institutions and high-net-worth individuals would prefer to park and invest their assets overseas, but the less well off have now begun to think likewise for the sake of their children’s education or on other grounds.

Yunfeng Financial has teamed up with 13 top-tier asset managers worldwide, offering an array of 343 funds that are easily traded on the “Youyu” robo-adviser mobile platform to help less wealthy investors allocate and invest their assets — a service that banks and financial institutions have traditionally shunned in favor of the rich.

Everyone’s investment demand varies, Li believes, and the core concept of the robo-adviser falls on service.

The online app aims to offer tailor-made wealth management facilities to clients with institutional services standard, and could also be like a camera’s fool mode allowing investors to use the platform easily, according to Li.

“What we’ve started is the 2.0 version of robo-adviser, different from the 1.0 version and other online fund supermarkets. We not only provide the service that is included in the 1.0 version, but also active mutual funds other than ETF (exchange traded fund) products for investors’ asset allocation and underlying asset with alpha (active return), which means we care about both asset allocation and the selection of asset managers through multi-dimensional ratings.”

Companies, especially overseas fund distributors, barely possess the ability to make multi-dimensional ratings, which is Yunfeng’s core competitiveness, Li explains to China Daily.

Room for improvement

“Investors also enjoy freedom to choose funds on our platform, which is beyond the function of the 1.0 version.”

The application could be improved in terms of upgrading products and comparison of funds, as well as change of asset managers. The vital thing at the moment is that it has enough flexibility for future improvement.

Li says robo-advisers in the United States, including Wealthfront and Betterment, are still under the 1.0 version as they offer standardized services with low management fees, and have reached the bottleneck in growth; while many other companies which define themselves as robo-advisers are actually only using machines to do quantitative investment strategies.

According to Li, the 1.0 version of robo-adviser is focusing on identifying investors’ risk tolerance and providing each of them with a diversified balanced fund based on their risk preference.

The company will continue to cooperate with companies in Hong Kong and do promotional work. Li says the feedback from their existing partners is good, and the initial results will be assessed at the end of this year.

According to Li, the robo-adviser’s business model is to get the commission from fund sales, which are far less than that of traditional funds.

Recalling her experience at State Street, Li says she had seen the demand for global asset allocation by Asian institutional investors rise tremendously from zero to almost every institutional investor having their own basket of global assets.

The next direction would be for Asian companies going through investments and mergers and acquisitions to become real international companies, and Yunfeng wants to be a part of that process.

Comprehensive services

The global asset allocation of individual investors is just the beginning, says Li, believing that foreign institutions will not be able to better serve Asia’s retail investors.

Strategy-wise, Yunfeng will position itself as a comprehensive financial services provider in corporate finance, focusing on mergers and acquisitions of companies, and employee stock ownership plans for listed companies and those  planning to go public, as well as brokerage   and wealth management services.

Compared with Ant Financial, which is also backed by Alibaba Group, Li says Yunfeng provides financial services through technology mostly to less wealthy people, while the former is a “tech-fin” company that concentrates on technology-related businesses.

On financial innovation, Li says the new business model is created by Chinese people amid the technology and innovation boom, rather than imitating the mature business models in the US, and this is a big difference compared with the situation 10 years ago.

However, the US financial market is more mature and the degree of its coverage of financial services is much higher, but the traditional financial market has not been overturned by fintech companies yet as the latter make up only a small part of the market.

Li praised the hardworking and dedicated attitude of the Chinese people that has contributed to the technology fever on the mainland, complemented by a huge and quality labor force, as well as a vast market and adequate capital and the government’s encouragement, although the fast pace of fintech development has given rise to problems, including instability.

She recalls that 12 years ago, when she first came to work in Hong Kong, she felt the super convenience of the Octopus card, but there’s still no big change in terms of payment methods at present. On the mainland, payment for goods and services has been made super convenient.

Although Hong Kong, which had gone through major financial crises in the past two decades, has been more conservative in introducing financial regulations in the past 10 years, she would like to see the financial regulator redefining the city’s strategic position to remain as an international financial hub.

Li thinks Hong Kong presents enormous opportunities ahead and could play a bigger role in the region, adding that Yunfeng may cooperate with companies along the Belt and Road Initiative countries and regions.

‘Patient opportunist’ who won’t miss the boat

Yunfeng Financial Group boss Li Ting calls herself a “patient opportunist”, putting new and meaningful tasks to the test and embracing the challenges.

“You have to react quickly at all times, grab the fleeting opportunities in the market and correct the errors immediately, otherwise, you’ll never get it again,” says the chief executive officer of the financial services arm of Jack Ma’s Alibaba Group, alluding to the Chinese saying “once you’re past Suzhou, you’ll miss the boat.”

Li prides herself on an impressive career record — landing her first job at leading world wealth management corporation State Street as a risk manager with the trading desk — after graduating from Wallace E. Carroll Graduate School of Management, Boston College.

Her diligence in studies won her the chance to work for State Street. She recalls having detected a textbook error and bringing it up with her professor at university. She was given top marks for that initiative and when she applied for a post at State Street, the corporation rang up the university following a recommendation by the professor.

Li expresses gratitude for having “grown up” with State Street for 14 years and being given the opportunity to assume various roles in Hong Kong and the United States, including portfolio risk manager, portfolio manager for US fixed income, head of risk of Asia Pacific, managing director and head of China market development, senior managing director and head of Asia ex-Japan.

She felt it was a breakthrough when she was approached by Yunfeng’s management, allowing her to embark on a new journey with a company she has now been with for the past two years. 

She saw the potential for developing the robot-adviser to fill the market vacancy and build up an ecosystem linking business institutions with retail investors.

Li defines her job at Yunfeng as being very different from her previous experience, working for a well-established financial enterprise where people still have a “safety zone” to follow the rules while in a startup company.

“Then, you need to be really fast and accurate, and no one will tell you if you’re going in the right or wrong direction.”

Li also offers a rather intimate warning for the younger generation — a rolling stone gathers no moss. They have to be steadfast and clear in their work and discard the mentality that they must hit their first pot of gold before 30.

“People in their 20s should focus on improving their abilities. You should be clear about your core strength and develop it to the fullest. It will pay off one day.”

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