Farringdon to launch Shariah-compliant robo-adviser in Asia

Added 27th October 2016

The Malaysian-based wealth management firm, Farringdon Group, said it plans to launch Asia’s fist Shariah-compliant robo-adviser in December.

Farringdon to launch Shariah-compliant robo-adviser in Asia

The service, called Algebra, will be open to investors worldwide with as little as $200 (£163, €183) a month to invest. It will offer a selection of funds from the Islamic Master Select Portfolio, a strategy with five risk-weighted baskets.

Shariah rules

Shariah-compliant refers to funds that follow basic Islamic principles. For example, no stocks may derive income from gambling, alcohol, tobacco, pork products, adult entertainment or military equipment. It also restricts the use of some mainstream financial instruments such as debt-financing, charging interest or the use of derivatives.

Research by the Malaysia Islamic Financial Centre has shown this global Islamic fund industry is expected to reach $77bn in assets under management by 2019, up from around $58bn currently.

According to Bloomberg, the MSCI World Islamic Index has grown by 3.8% in 2016 and is set to outperform its more established counterpart for the first time in five years

New tool

The new robo-adviser will be operated by Farringdon Group, a private wealth and investment manager with $170mn in AUM, which was established in Kuala Lumpur in 2007.

“Algebra brings together the sound investment principles of Shariah-compliant funds with the next generation of investment tools,” said Stuart Yeomans, chief executive of the Farringdon Group.

“We believe in bringing greater choice to the market, catering to untapped investor appetite,” he said. 

The new robo-advice service comes hard on the heels of Farringdon’s announcement earlier this month that it would set up a discretionary portfolio management service in Singapore after receiving a licence from the monetary authority.

Yeomans said at that time the group was aiming to shake up the investment sector across Asia by pioneering new ideas that the market has not yet seen, but sorely needed.

“It will be interesting to see how other firms react when we come to market with our new strategies and offer advice in a unique and lower cost format,” he had added.

Farringdon provides private wealth management and personal tax planning solutions for individuals across Asia Pacific, Russia and Central Asia.

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Richard Hubbard

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Richard Hubbard is the group editor at Last Word. He is responsible for the editorial content of International Adviser, Portfolio Adviser, Expert Investor and Fund Selector Asia. Richard previously worked for Thomson Reuters and has covered the financial services industry and investment themes from its offices in London, Singapore, Hong Kong and New York. Richard started his career at the Australian Financial Review in Sydney.

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