Farringdon Group is proud to confirm the launch of its’s new Robo adviser service which follows Shariah investment guidelines. Its shariah investment strategy is approved by well-known Shariah Scholar Datuk Dr Daud Bakar of Amanie Advisors.
The official launch date is July 10th 2017.
Their new system branded as “Algebra” is aiming at revolutionising the way its prospective clients receive advice. Algebra can complete a fact find and calculate its clients risk attitude, from asking questions online and this cuts out the need for expensive consultants that ask similar questions face to face.
Stuart Yeomans, Farringdon Group CEO commented:
“This really does embrace fintech and with SEA making technological advances, we feel that the time is right for us to use an automated system which can provide sound financial advice. The beauty of this system is that we do not need to cover high salaries, with sales commission and we are passing 100% of those savings onto our clients.
We have built the Shariah version of this platform and have also incorporated a Non-Shariah option. Hence, whatever your investment profile is, we can mould a portfolio around your investment principals and appetite for risk.
All we ask is for people to give it a go online and then compare our fee structure to those advisers around the region; because we feel that people will be pleasantly surprised. I personally want to stamp out these heavy commissions that charge you up to 5% to enter a fund!”
After talking with the Algebra team, we found that a total expense ratio would be below 1% per year. To put this into context a traditional adviser in SEA could charge up to 5% to enter a fund and then the fund manager would levy a fee between 1% – 2.5% per year. Some platforms even charge to use their structure and over a medium-term investment a client may pay upwards of 3% or more per year for advice when averaged out.
Algebra can operate with its funds, fees and administration for roughly 0.85% TER per year!
We also asked Stuart, why they chose Labuan as their jurisdiction of choice?
“This was a simple choice for us, we are launching an Islamic product, so why not launch it in the Islamic financial hub of the world. Labuan has so much to offer the world, with regards to Shariah Investments and I have lived in Malaysia coming up to ten years now. So, it was a natural choice for our company that has been operating as a broker for 9 years out of Labuan.
We had an option to have our product regulated in mainland Malaysia or to register it in Labuan and focus on the wider region outside of Malaysia. This again was an easy choice for us, because we want volume business and our investments will focus on USD, GBP and EUR throughout the globe. Not to mention that I have worked very closely with the regulator in Labuan for many years and want to help with their vision of expanding products across Asia and more importantly creating jobs on the island.
We are already in talks with some of Malaysia’s banks and investment institutions, for a local RM product that they can operate under their license and welcome more companies that wish to use our system; we can simply come to an agreement for them to have our system for the local market and RM investments. We have no interest in operating a license for local currency, so are happy to co-operate with local license holders and the authorities to give them our system.”
Algebra’s team want to lay the path for lower fees and to change the advisory market as we know it. Essentially offering quality advice with lower fees.
Algebra relies on smart beta trading algorithms to derive its active equity portfolio, it then blends this with fixed interest ETF’s or Sukuk bond funds, to derive a risk weighted portfolio suitbale for an investors risk appetite.
Martin Young Farringdon Asset Management’s CEO in Singapore said:
“Our team spent a great deal of time developing the smart beta algorithm that powers Algebra. Our smart beta strategy is one of the few Islamic investments in the world which outperforms the sharia S&P 500 index and does so with a lower level of volatility.”