Hong Kong, 7 July 2021 － LU International (Hong Kong) Limited (“LU Hong Kong”), a subsidiary of Lufax Holding Limited (“Lufax”; NYSE: LU), introduces Hong Kong’s first open robo-advisory platform, offering tailor-made asset allocation solutions through its professional AI investment consultant “Lucy”.
LU Hong Kong is also proud to enter into an agreement with BNY Mellon Investment Management (“BNY Mellon”), one of the world’s leading investment managers with US$2.2trillion in assets under management and a leading provider of Outsourced Chief Investment Officer (OCIO) services.
Under the agreement, BNY Mellon will provide investment advice to LU Hong Kong based on the risk profiles and investment restrictions defined by LU Hong Kong. BNY Mellon does not consider circumstances of individual investors in offering investment advice to LU Hong Kong.
It will be the first Asia Pacific ex Japan collaboration for both LU Hong Kong and BNY Mellon Investment Management.
Empowered by Lufax’s advanced technology, LU Hong Kong’s AI-backed Lucy offers professional wealth management services and asset allocation solutions with a low investment threshold. Advisory fees will also be waived for a limited period to allow users to experience the new fintech service with the specially-designed user interface.
LU Hong Kong’s professional AI investment consultant Lucy will offer portfolio options taking into consideration the investor’s financial profile including their income, financial objectives, risk appetites and investment objectives.
By using LU Hong Kong’s open robo-advisory platform, retail customers will invest in a model portfolio that may include BNY Mellon Investment Management funds and other leading asset managers across equities and fixed income in both developed and emerging markets.
LU Hong Kong’s open robo-advisory platform will aim to help retail investors resolve common challenges such as:
i. The need to eliminate the impact of emotional bias by offering a systematic and quantitative tool that ensures retail investors stick to a risk management strategy that meets their risk preference and investment targets.
ii. The need to reduce time associated with face-to-face know-your-customer processes, especially for tech-savvy investors.
iii. High management fees associated with sophisticated and complex investment strategies.
The announcement comes at an opportune time given the rising interest in robo-advisory services. According to a report by Statista, the total number of users of robo-advisory services in Hong Kong is expected to increase by 28% to 215,500 in 2021 and reach 368,800 by 2025.
Total assets under management associated with investments made with the help of robo-advisors, on the other hand, is expected to more than triple to US$6.4 billion by 2025 from an initial figure of US$1.74 billion in 2021.
In particular, the upcoming launch of the “Cross-boundary Wealth Management Connect” scheme is expected to bring substantial business opportunities for financial institutions in Hong Kong due to the rising number of customers from Mainland China keen to embrace financial technology and financial services offered in Hong Kong.
According to a Statista report, total assets under management associated with robo-advisors in the United States is currently as high as US$937 billion; China ranked second with AUM reaching US$91 billion. Looking forward, LU Hong Kong plans to use its strong financial technology capabilities to increase access to robo-advisory services following the official launch of “Cross-boundary Wealth Management Connect”.
Mr. Cai Hua, CEO of LU Hong Kong said, “We are delighted to cooperate with BNY Mellon Investment Management, a highly experienced asset manager, as we seek to introduce the first open robo-advisory platform in Hong Kong. The launch of LU Hong Kong’s robo-advisory service is the result of our drive to provide a suitable risk management and investment analysis tool for retail investors that is more robust than individual efforts. We always seek to offer new solutions to help retail investors build resilient investment portfolios in alignment with their personal risk and investment preferences amidst a highly volatile investment market. AI-backed solutions can enable retail investors to choose an appropriate strategy that will be executed by sophisticated algorithms offering peace of mind.”
Mr. Doni Shamsuddin, Head of Asia-Pacific (ex-Japan) at BNY Mellon Investment Management said, “Since the launch of our OCIO business in Asia Pacific last year, we continue to see strong demand from intermediaries for our capabilities. We are looking forward to working more closely with digital banks, fintech startups, as well as wealth managers and family offices looking for an outsourced investment solution.”
