Ant Financial, Vanguard to start retail investment advisory service

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Chinese fintech company Ant Financial and US-based asset management firm Vanguard will begin providing investment consultancy services to individual investors in China.

Why it matters: Vanguard, one of the largest public mutual fund providers in the world, is one of the many foreign asset management firms that hope to gain inroads in China. The partnership with Ant Financial is said to pave the way for Vanguard to acquire a license allowing full control of its ventures in China.

  • Vanguard, BlackRock, and four other overseas financial institutions have expressed their intention to apply for fully foreign-owned mutual fund licenses in China, according to Bloomberg. The country’s securities regulator said in October that overseas institutions can apply for total control of onshore ventures starting next year.

“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,”

Peter Zhang, CEO of the joint venture

Details: The two companies will advise Chinese investors on fund investment, a service for which it has obtained approval from the China Securities Regulatory Commission, through a joint venture.

  • According to Vanguard, the JV will provide customized services for investors based on risk preference, time frame, and investment objectives. The service will be accessible through its mobile payment app Alipay and its wealth management platform Ant Fortune and will accept minimum investments of RMB 800 (around $113).
  • Ant Financial told TechNode on Monday that the official date of service launch will be revealed “soon.”

Briefing: Ant Financial, Vanguard form joint venture in Shanghai

Context: Alibaba’s fintech affiliate Ant Financial set up a joint venture with the Shanghai unit of Vanguard in June, government records showed.

  • Vanguard opened its Shanghai office in 2017. It claims to have $5.9 trillion worth of assets under management, as of the end-October.
  • Ant Financial’s Alipay boasts a global user base upwards of 1.2 billion, and operates the world’s largest money market fund, Tianhong Yu’e Bao.