Wealth creation for all

Guardian Asset Management (GAM) has become the first investment company in the Caribbean to introduce a robo-advisor platform, ushering a new wave of options for investors.

Robo-advisor platforms are a relatively new innovation in the fintech landscape, coming into favour more recently, on a global scale, with millennials and tech-savvy individuals. A robo-advisor is essentially an online wealth management service that provides algorithmic portfolio management, so portfolios are automatically selected, invested and rebalanced but the work of creating the investment portfolios, perhaps for now, remains the domain of people. The primary benefit is that the overall cost of investing is reduced, in turn allowing reduced fees versus traditional, financial advisory channels which have higher minimums and are built as needed on a more personal level.

GAM’s platform – coined Genius – launched at Buzo Osteria in St Clair, on September 25, is a proprietary, automated, wealth-planning portal that provides an always-online space for investors to view their financial investment portfolios anywhere – from the boardroom to the bedroom.

Genius investors can visit gamgenius.com, register for the service and complete a questionnaire to determine their risk profile. The robo-advisor would then allocate the client into one of five risk pools – Rookie (risk averse), Apprentice (conservative), Semi Pro (moderate), Pro (growth) and Elite (aggressive).

Once funds are transferred (must be in US$ and meet the minimum US$5,000 requirement) by wire transfer, cheque or from another US$ GAM account, funds are then invested according to your risk profile, primarily in US-based exchange traded funds (ETFs). ETFs are investment funds, traded on stock exchanges throughout the trading day in much the same way that stocks are. An ETF is generally comprised of assets such as stocks, commodities or bonds and provide investors with immediate diversification within a lower cost, tradeable investment vehicle.

As with all investments, there is risk; however, with Genius, the client determines their risk and can monitor from the comfort of their home or office in a more direct manner – thereby investing with greater transparency than before, said GAM vice president, investments Narisa Hosein.

“It’s critical to note that you, the investor, are not driving the model directly but rather are directing it by how you responded to those questions on registration. It’s a managed service; meaning that the portfolio is already set within your risk tolerance band," said Hosein.

"However, unlike the traditional model where you save money in a bank account and then have to consider walking into a financial institution to then decide how to invest, you can simply now do this online and have direct access to see how it’s going from the comfort of your home,” she added.

Wealth management expert Tuula Jalasjaa pointed out that the Genius platform is a means of democratising the investment options for the TT market.

“Having insights for several years from the financial space across several different markets, we believe that the time is right to provide a more holistic look at financial investing,” she said.

Jalasjaa has led several key wealth management businesses in Canada – including HollisWealth and Scotia Asset Management US – and is advising Portland Holdings, the Canadian parent company of the Guardian Group, under which GAM falls.

In her current capacity, she is working with the Guardian Group to help shape and guide the strategic direction of wealth management and financial services in Trinidad, Bermuda, the Cayman Islands, Jamaica and other Caribbean jurisdictions.

“No matter what client comes in, a modern investment institution should have the right solution for them in keeping with their income and goals,” she said.

Hosein – who has more than 19 years of general banking, investment, sales, project management, portfolio management and trading experience ­– agreed, and said the investment platform complements GAM's private wealth service.

“Genius essentially allows anyone – the older investor or the millennial who has just started saving to look to investing in a user-friendly and less intimidating format. Those investors can save towards the investment minimum in other financial products that we offer and then move that investment into Genius where it would be managed by our team and the robo-advisor platform but at a fraction of the cost of the traditional investment platforms,” she said.

Hosein emphasised the benefits of investing in US ETFs.

"On a positive note, this will allow people with US dollar reserves to put their funds to work in a system that tolerates as much risk as they are willing to and they can then draw investment gains back into the local financial system as they wish, once they maintain the investment minimum."

A point which Jalasjaa reinforced, adding investors' aim to secure their future and their families as well. “Investors are now seeking ways in which they can achieve their goals – such as saving towards university for their children and they don’t want to do that in one mutual fund or bank account but in more diversified ways," she said.

"With the technology at play in everyone’s lives, they also want a digital means of doing so – and Genius was designed to meet all those criteria.”

The experts said GAM's push to introduce a robo-advisor platform in TT aims to encourage early and new investors towards more productive savings and investment habits – using technology – democratising investment options to a wider cross section of people in Caribbean economies, who may never have considered wealth management as something available to them. And that’s a positive step for everyone.