Five asset management firms in China have joined the platform known as Tougu Guanjia, meaning investment advisory manager. Ant already partners with Vanguard Group and wants to further grow in the robo-advisory space, which is anticipated to hit $1.1 trillion in the country.
The initial asset management companies on Alipay’s new platform are Harvest Fund, Southern Asset, Zhong Ou, E Fund, and China Asset Management. Last year, all five were approved for licenses to provide investment advisory services from the Chinese securities regulator in 2019. The China Securities Regulatory Commission approved 18 companies to extend fund investment advisory services in the country, per Bloomberg.
The asset management division of J.P. Morgan acquired a 10 percent stake in Chinese wealth management firm China Merchant Bank last week for $140 million. This marks the first time a bank in China has allowed a foreign investor to have any control over a wealth management subsidiary. The move still needs approval from regulators.
BangNiTou, a robo-adviser in China backed by Ant and Vanguard, has moved beyond 1 million users, making it the most popular platform in the country for investment advisory services. BangNiTou means “help you invest.” Its minimum investment is 800-yuan (about $122), and users are provided with portfolio recommendations based on 6,000 mutual funds that align with the investors’ comfort risk and investment goals.
Jack Ma’s Ant Group said at the end of 2020 that it was working on a strategy to move its financial services divisions to a separate holding company. Alipay will also transfer to the new holding company. The moves followed the suspension of its $37 billion IPO in Shanghai and Hong Kong last year by Chinese President Xi Jinping.