Professional investors throughout Asia are facing major hurdles when they are looking to expand their portfolios. However, thanks to a growing global economy, exciting new technology, and innovative business practices, none of these hurdles are insurmountable. As long as investors understand the obstacles in their path they will be able to find strategic partners and dynamic fintech startups to help them achieve their financial goals.
Five of the major hurdles facing investors today include:
1. Assessing cyber risks
2. Access to global high-yield investments
3. Slowing Asian based markets
4. Unwieldy fee structures
5. Lack of efficient investment platforms
1. Assessing Cyber Risks
Hackers and international criminal organization are constantly seeking to obtain as much access to private financial information as possible. Investors must be cautious about who has access to their sensitive information. Sadly, there are few regulations that govern when a firm must acknowledge that customer data may have been compromised. Without proper encryption and regulatory safeguards, people may begin to lose confidence in the online banking and investment system.
The rise of technologies like blockchain could help keep data safe. However, currently not enough firms are using the full power of blockchain to make data secure and transactions transparent.
2. Access to Global High-Yield Investments
Many of the best high-yield, low-volatility investment opportunities are currently in Western countries. Asset classes such as the U.S. consumer debt market is very attractive to institutional investors, but many professional Asian investors do not have easy access to these investments.
Traditional brokerages and investment banks are not doing enough to help regular investors expand into these high-quality investments.
3. Slowing Asian Based Markets
While many Asian markets have been some of the fastest growing markets in the world for more than a generation, as these markets are maturing, their growth is slowing. Investors who want to continue to increase the value of their portfolios will have to look to other parts of the world to earn the kinds of returns they are used to. However, finding the right opportunities outside of Asia is often difficult due to a lack of information to perform adequate due diligence.
4. Unwieldy Fee Structures
Many Asian investors are stuck working with investment banks and traditional brokerages that have complex, unwieldy fee structures. Every year investors are seeing more of their returns gobbled up in a series of different fees.
These high transaction fees are causing long-term value issues for investor portfolios. Most likely, competition from low fee fintech firms will eventually drive down the fees that traditional financial service institutions charge.
5. Lack of Efficient Investment Platforms
Asian investors that want to have their money invest efficiently often run into a problem finding the right platform to use. There are not enough easy to use platforms that give investors easy access to vetted asset classes that are high-yield and low-risk.
Investors want tools like a simple dashboard to check the growth of their portfolio and to monitor potential future investments. They want to be able to move in and out of assets quickly and easily.
However, until there are Asian focused fintech platforms, many investors will find they waste a lot of time and money tracking down investment opportunities and in aggressively managing their portfolios.
By Jason McBride