Vanguard Group, the USA based investment management service provider and Ant Financial Services Group, the China-based Fintech known for its payment and lifestyle platform Alipay made an announcement recently revealing plans for a partnership to provide investment advisory service in China.
Vanguard Group is a Pennsylvania based investment advisory, asset management, ETF brokerage and Mutual funds service provider with assets worth more than US$5.3 trillion under management. Ant Financial Services is an affiliate company of Chinese conglomerate Alibaba Group widely considered as the highest valued FinTech Company in the world and the world’s most valuable start-up company with a valuation of US$ 150 Billion. Both the firms currently boast a well-established foothold and significantly large customer base in the Chinese Financial market.
The firms have now revealed plans for a partnership to start a joint venture which will provide a streamlined and broadly available investment advisory service to retail consumers in China as approved by the China Securities Regulatory Commission (CSRC) to Chinese individual investors.
This joint venture will combine Alipay’s technology officer and Vanguard’s expertise in investment management and advisory service to bring into reality a revolutionary change in the advisory service market in the Chinese financial services sector. Currently, professional investment advisory services are only accessible to a small and select group of high net worth individuals in China.
However, this joint venture will now bring to the Chinese financial services market a customized service for retail investors based on their investment objectives, time limitations, and risk preferences as long as the clients meet minimum investment requirements set at 800 RMB approximately USD 113. This service is expected to be made available to investors via the Alipay app.
However, this is not first such tie-up for Alipay, as the firm is currently partners with various service providers to meet its clients’ needs for a wide range of services from paying utility bills and hailing cabs to making doctors’ appointments and providing wealth management services. One of the most well-known wealth management partnerships for Ant Financial to date is its deal with Yu’e Bao – popularly known as the spare cash management platform. Via its deal with Yu’e Bao, Ant Financial allows its clients who use Alipay app to purchase money market funds from the cash management platform.
Aside from this deal with Yu’e Bao and upcoming joint venture platform Ant Financial Group brings a wide range of wealth and asset management services to its clients who use Alipay via numerous deals made with many financial service providers under the Ant Fortune platform.
Speaking about this joint venture, Peter Zhang who has been appointed as CEO of the new business division said. “Today, millions of Chinese investors lack access to professional investment advisory services. Through this partnership, we will reduce complexity and significantly lower the threshold for individual investors to access high-quality wealth management advice in China. We are delighted to bring this important service to more people in China and look forward to supporting the sustainable growth of the wealth management industry”.
Speaking on the same topic, Eric Jing Chairman and CEO of Ant Financial said, “Alipay is committed to making finance more inclusive for individuals as well as small and micro businesses through technology, and we’re partnering with financial institutions around the world to achieve this by building an open and technology-driven ecosystem. Combining our technology with Vanguard’s investment advisory expertise will make high-quality wealth management services simpler, smarter and more inclusive”.
Mr. Charles Lin – CEO of Vanguard Asia & Chairman of Vanguard Investment Management (Shanghai) Limited added, “We are excited about the opportunity to help millions of investors. Through this partnership with Ant Financial, investors will have access to investments and advice previously unavailable to them. Ant Financial has been a true partner as we work together to improve the investing lives of the people of China”.