Jay:  This week’s show guest is Bhaskar Prabhakara, co-founder and CEO of WeInvest. WeInvest is one of Asia’s leading digital wealth providers, helping banks, brokers, and wealth managers launch a full-suite digital investing experience for their relationship managers and customers.

Bhaskar, welcome to the show.

Bhaskar:  Thank you, Jay. And thank you for having us here.

Jay:  Yes, we’re happy to speak with you and have you on the show and learn more about your company. Before we dig into exactly what we WeInvest is, maybe you could give us a little bit of personal background of yourself — who you are, where you’re from originally, and how you came up to becoming an entrepreneur.

Bhaskar:  Sure. I grew up in India. After finishing my engineering and my MBA degrees from some pretty good colleges — I started off in banking — I was part of ICICI, India’s largest private bank at that point in time, working on creating some structured products. And then I moved on into consulting and traveled across the Bay Area to London, spent some time consulting with Charles Schwab, Reuters, and pretty much a lot of the capital market investment banking clients in London, like Goldman, Crédit Agricole, CMC Markets, and so on.

I spent almost eight years there in London before moving to Singapore in 2012 where I still head up the Asian business of the same capital markets consulting firm called HeadStrong. And over these years with HeadStrong, I’d kind of built up businesses from scratch, working with a lot of capital markets organizations in moving what you call brick-and-mortar models into digital business models.

Then it occurred to me that I’d been building businesses for others. We got acquired, and I said, “Why should I try to do it for myself?” And hey, wealth seemed like a very personal problem, growing from being a mass market investor to a — let’s call it an affluent investor to a high-net worth investor. The problem hadn’t gotten any easier, but it actually seemed it had gotten a bit worse. We said, “Why not? Let’s try and solve the problem. We’re used to taking brick-and-mortar models and making it into a digital business model.” And there were lots of opportunities here. So, 2014 is when we embarked on WeInvest.

Jay:  Back to your experience before that. You’ve done a number of consulting type jobs, working directly with wealth managers at longer investment banks, global investment banks. What were the actual solutions that you were working on at these banks that helped you along the way? I that you obviously have vast international experience. What was the actual solutions that you were working on at the various banks?

Bhaskar:  A couple of examples were we were working for Goldman on building out some of the electronic trading connectivity, high frequency kind of connections to exchanges. We embarked on one of the dark pool exchange programs where we were trying to match orders across a variety of asset classes, worked with CMC markets where it was a proper market maker on contract for differences as a product. And it was literally [40 sales traders 0:04:33] calling out clients and getting them to trade. Since we converted it into an entire digital platform where right from clients getting on-boarded to getting online tutorials to marking their first trades to being able to work on a next generation front end to trading CFDs to being able to actually, from a backend perspective, do real-time position keeping and connectivity to multiple prime brokers to, again, the whole feedback loop.

And I think that CMC experience was phenomenal because it was really taking an end-to-end play and making it a completely digital model.

And then I moved here, as I said, and worked with folks like Macquarie and moving a lot of their capital markets. I worked through different areas. We implemented the new exchange in Bursa Malaysia on the stock exchange. So there was a lot of capital markets, creating connectivity, getting an end-to-end flow of business going in. Some of the asset managers, we worked on building out more position keeping and bookkeeping kind of platforms for them to more [inaudible] with what was happening from a real-time client reporting perspective.

Jay:  Right. So are you currently in Singapore or Malaysia right now?

Bhaskar:  I’ve been based in Singapore for the last six years.

Jay:  It sounds like you do have a vast amount of experience in both banking and technology. So you’re able to draw on those experience from your past to create a solution which, I guess, today is called WeInvest. Was there any sort of personal pain points — when you talked about growing your wealth and wealth management — that lead you down this path? You referenced that you said, “Why don’t we just give it a go and try to solve this problem ourselves?” Was there a particular experience that you had that lead you to that point? Like how did you stumble upon… Look, there’s many solutions out there that you could have tried to tackle and go after. Why this, particularly? What a wealth management type solution?

Bhaskar:  Sure. Well, it kind of goes back to background in terms of we came out of some of the best colleges. We came from a very middle-class background. And even that mindset of having to save and then invest, I did start investing quite early on. Typically, we used to do real estate investments, which is fine, but then was, obviously, a lot of issues around how do you get liquidity in an asset class like real estate? How do you try and then start investing in financial assets? At least in Western Europe, there were what you call a lot of low-cost brokerages.

But as we moved into Asia and we were starting to look at how do you invest — and we’d kind of grown, I guess, as a family, into more affluent or high-net-worth situation — the number of products is obviously pretty wide in terms of the choices. But in terms of getting advice, it didn’t seem like the easiest area to find a trustworthy advisor. A lot of IFAs, or independent financial advisors, seemed to have taken a very mutual fund-oriented or insurance-oriented route to get a really high kind of sales charge and kind of trailer fees.

And many of the banks were also charging pretty obscenely sales charges, and the private banks were maybe just a bit out of the reach. At least on the affluent level, I felt it was not necessarily easy if you didn’t have a very good understanding as to what are you getting charged.

And hence, we had, from a family perspective, had been working in the financial industry, and we started investing on our own. But I said, if someone like us who is pretty well educated, who has worked in the financial industry, is finding it tough to potentially get unbiased advice and maybe low-cost investment opportunities, the problem must be much worse across the other sectors or segments. And hence, that’s the personal pain with which we started saying, “How do we try and make investing easier.”

Jay:  This is interesting actually. I come from a finance background as well. I spent a number of years on the Southside in Wall Street, working at various investment banks. And now I’m a full-time investor. I work at a hedge fund. And I’m also a private equity investor. I’ve had to learn a lot of that on my own, despite the fact that I spent a career on Wall Street. And I think you’re right because a lot of times when you join Wall Street, you get pigeonholed into a certain specialty. It’s kind of one of those things where I would go to a family reunion and people would ask me, “How should I invest my money?” And the advice that you’re used to giving to clients, say, on Wall Street and this sort of thing, is completely different than you would give to an individual, from both a risk profile to even the complexity of the instruments that you’ll be using to invest, to be trading. So I completely understand where you’re coming from.

Having said that, why don’t we dive into your business, WeInvest. Tell us a little bit about, first of all, the team. How did you get started? Who are your co-founders? And maybe just give us a broad overview of what the actual business is.

Bhaskar:  Sure. I’ll give you a quick overview of the team. It’s the three of us who are co-founders. Aananth is the CTO. He came from a pretty distinguished background of being the CTO at WeLend, which has launched, I think, a huge number of B2B lending kind of a business across Hong Kong and China — an extremely successful kind of startup. It’s no longer one in terms of… It’s a unicorn. And he was there for almost three and a half years. Before that, he was with Standard Chartered, running the Breeze program, which Standard Chartered uses and use their mobile app that’s called Breeze. And he kind of spent his early years in technology in Oracle and Amazon. He’s gone through the whole phase of changing and evolving technologies in Amazon and then working in fintech, both in Standard Chartered and also in WeLend.

Rajesh, on the other hand, who is the COO, started off setting up operations, and he did a lot of operations in India, setting up operations business for both HSBC and Lehman Brothers, across Bombay and Pune. And then he did his startup stint with an ad tech exchange called PubMatic and then was in the US when we touched base, and we got talking about what we were going to do and then kind of moved to India to be a whole anchor for us in India.

And Aananth and I got introduced through a mutual friend of ours, and the whole thing made sense.

Jay:  Got it. Let’s talk very basic about the company and your business model itself. What exactly does WeInvest do, if you could explain it from a very high level? And then if you could walk us through the user experience, if you will.

Bhaskar:  Perfect. While we were thinking of making the whole experience of investing a lot easier, WeInvest basically focuses on ensuring the fact that it can be done from an end-user or — let’s call it — individual investor perspective who typically is a mass market investor or emerging affluent investor. But we also ensure the fact that we make investing easier through a relationship manager. So that’s largely the affluent or high-net-worth clients who use a relationship manager. So for both sides of the segments, we build different solutions, and they’re called GrowWealth and AdviseWealth. GrowWealth is a sales service, advisory platform. And AdviseWealth is a RM-assisted advisory platform.

The whole idea is these digital wealth platforms, we white label it for banks, brokers, asset managers, insurance companies to basically ensure the fact that their clients can get access to a next-generation investment experience.

Jay:  I see.

Bhaskar:  So we are not a direct B2C kind of business. What we’ve built is an entire stack of not just technology but also investment strategies, the operations to support a wealth management business. We’re actually managing the whole platform on the cloud. And we launched this for multiple firms. So we just launched, over the last month, a robo advisory platform with CGS-CIMB, one of the largest securities firms in Southeast Asia. We launched a self-service advisory platform with OCBC Bank, the second largest bank in Singapore. And we have multiple launches coming up — one with the largest bank in Thailand, a couple more in the Middle East, and one in the UK.

Jay:  Okay. It sounds like you guys are getting some great traction then. Let’s dig in a little bit deeper. My understanding is it’s almost like a SaaS product that is white labeled with the end host, which is probably a bank or an advisor, a wealth manager, or a relationship manager. Let’s just take OCBC for example. Let’s say I’m a customer of OCBC, and I have an account there. And I want to use… Is Grow Wealth is one that I would be using via their platform or AdviseWealth?

Bhaskar:  GrowWealth is what you would be using in OCBC or CIMB. And let’s give you a quick overview. There are, again, multiple journeys which we have enabled there. So let’s say you’re a not so sophisticated investor. Let’s say you’re a newbie to investing. You could go in and across different versions there are slightly different nuances, but you could go in and set up your goal, go through a risk profiling in one case, whereas in another case, you could just choose a risk profile and then get recommended an investment portfolio which is potentially suitable given your financial position and your risk profile.

Going forward, you could kind of completely do an online onboarding onto the platform, providing all the documents and making all the potential documents, uploads done. And then you could also make an instant transfer and within a day, your portfolio is set up. So it’s a classic 1.0 robo advisory kind of a journey. And I use “robo advisory” only because it’s a common nomenclature, not that I love the term.

But on the other hand, if you’re a sophisticated investor, you could potentially go and explore what we call a wide variety of managed account portfolios. These range across thematic investments to other kind of passive, long-term asset allocation investments, which means that you could invest for the short-term to medium-term with some of these thematic baskets you really kind of associate yourself with. And then some themes are extremely interesting. So I could associate with, for example, Clean Energy or Water or maybe even Yummy, which invests in chocolates, snacks, and coffee.

On the other hand, there may be slightly more sophisticated hedge fund investor like you could maybe associate with high interest rates as a theme or Australian financials or Trumponomics, which is around the Trump’s industry reports of increasing infrastructure spending.

So there are a variety of these themes, which I feel are far more relatable for investors in today’s world rather than the long-winded trust or some of the structured product names.

So you could take either of these journeys as an end investor and completely go through an advisory process online along with, obviously, real time reporting, notifications. You could get advice once every few months saying we’re rebalancing your portfolio either given market movements or the fact that your portfolio has deviated from the asset allocation significantly. So we want to get it back…which is typical of any kind of systematic investing program.

Jay:  Right. I’m curious. Where did the strategies come from? Let’s go back to the example that you just gave. Let’s say you wanted to do thematic investing, and you wanted some exposure in Trumponomics, like you said. Who puts that together? How does that get populated? And how does that get expressed in the form of an investment product?

Bhaskar:  Good question. You called us a SaaS, which is software as a service, typically provided on the cloud. We call ourselves, typically, a platform as a service because we provide an end-to-end digital wealth as a service. And the primary reason being that the investment strategies are also provided by a platform, and we also run a lot of the operational support, however small and minimal it is, including a client onboarding, related ops, or even trade reconciliation, or evaluation, or any other operations supported by it.

But coming back to the strategies… Chiranjeet is one of our co-team members, came in, again, very early on, almost two and a half years back. He came from a background of running prop strategies in JP Morgan, Citi Bank, Nomura, Lehman Brothers. And we said, “Hey, why don’t we build on what strategies you’ve been working on in the past and try to make them even more systematic and algorithmized?” So we use a variety of approaches across passive asset allocation and, for the thematics, a lot of factor-based kind of systematic investing models. We largely believe in a QVM (quality, value, and momentum-based investing model) to construct of a lot of these portfolios. And we kind of created almost 50, 55 of them.

But that’s not the only piece. We also went ahead and collated strategies from a variety of index providers — MSCI, S&P, Morning Star, some of the other asset managers like Schroders, some of the specialist point firms from the UK. One of them came out of Morgan Stanley Investment Management, and we have what’s called a global brand strategy from them.

So our view is the fact that it’s not just our strategies, but you should be able to get the best of all worlds by getting the best systematic investment strategies from across a variety of providers. And the financial institution we deal with is pretty much open to either only using their strategies, which is there in-house strategies, or choose for the best of what we have in the marketplace.

Jay:  Right. It makes a lot of sense. As far as the AdviseWealth vertical, maybe you could walk us through that quickly.

Bhaskar:  Yes. That’s been one very interesting piece because that has actually enabled a lot of customer feedback, which we were getting really early on in late 2015, which kind of lead us to build AdviseWealth.

The relationship manager, as a channel, has always been a very important one, especially in the affluent to high net worth, where we call it Premier Priority Banking in a retail bank or in the private banking space.

But the pace at which that affluent or high-net-worth segment is growing to the pace at which RM, or relationship managers, are being able to scale it, develop numbers, is obviously widely different. And apart from that, you obviously have challenges around compliance controls. You also have challenges around travel, productivity being the key issue and how do you really engage clients. And we felt that a lot of these were related to the fact that the RM (relationship manager) was almost kind of left as “Here’s some information which was we sent to you on email.” “Here’s a whole bunch of forms for you to fill.” “Here’s an investment advisor” or a product team if you’re in a pretty tier-one institution…” But in other cases, those aren’t even there. But off you go.

We felt that there was a pretty good opportunity, and if you look at some of the models in the US or even in mainland Europe, the RM (relationship manager) has been required to be digitally enabled to kind of make him as productive as possible, not only in the advisory process but also ensure the fact that the backend process is as straight through, automated as possible in the whole experience.

And that’s been our whole philosophy across all the products. It’s digital wealth or digital solutions. It’s not about only a user experience, which I call the tip of the iceberg. When you could really have a great, amazingly well designed front-end experience, but if the backend is not as digitally straight through as the frontend, it just doesn’t make sense as an end-to-end digital proposition.

So we focused on a lot of straight through, crossing through the middle office, back office — right down to execution, connectivity, and being able to execute, create straight through with some of the best brokers around the world. And that whole process helped us inventing, at the relationship manager level. We’re going to help them go through his entire series of tasks, analyzing clients and analyzing client positions, being able to convince them on what they should be doing next, to being able to manage their portfolio through alert, notifications, through a wide variety of ideas and news and risks.

So an end-to-end enablement of the relationship manager so that he can run his entire business of advising and managing people’s money on a tablet and basically be extremely mobile, never have to come back to the office unless he really wants to spend some time with his colleagues or with the products team. That’s what we went for. It’s what we call the JARVIS suit or the Ironman suit for the RM, for him to kind of [inaudible] boosters

Jay:  Yeah. It makes sense as well. I mean, I’m just thinking I have a relationship manager at a private bank, which I won’t name, but he’s very good. But I’m just thinking how, traditionally, a lot of the private banks were the bankers, and the RMs were forced to exclusively sell their own in-house products. And they still are to a certain extent, but I’ve seen that shift a bit now, and they’re actually opening up to basically catering around the needs of the client, regardless of if their institution can provide that or not. So that’s good to hear. But it sounds like AdviseWeath… Let’s say if I were in their shoes and I was a relationship manager, it would be nice to have, basically, a seamless platform like you described that I can basically access out of the office on my tablet and take care of all of my clients and track everything remotely. So it sounds like a pretty good value proposition that you have there.

Why don’t you tell us a little bit about the economics of how WeInvest makes money and then how do the fees work? I imagine it’s a subscription type model from the banks and the parties that use you. But is there any sort of incentive fees when one of the end products gets used or invested into?

Bhaskar:  We have a wide variety of what we call models, primarily because when we do the platform as a service — and I call the six or seven parts of the iceberg or the entire service we deliver as front end, user experience, and the technology, the middle and back office technology, the investment strategies, the market data and all the infrastructure connectivity to a variety of exchanges, the operational support on managing this platform to also the infrastructure support when it come to technology infrastructure, and we run it on the cloud in AWS and other cloud providers… When I provide that entire stack, I’m basically running your business of wealth management. And when we pull that entire stack and we provide that as a comprehensive service, if you call it PaaS, or platform as a service, or digital wealth as a service, we do charge an AUM based fee.

For other models, which is akin to typical fintech players where either I’m going to provide you only the technology and I’m going to provide you the technology in install it in your enterprise infrastructure, we do go by per user pricing sometimes or a license fee model. Although we’ve not had a SaaS install, but where someone just wants the technology and nothing else — we’re maybe doing one of that right now in Thailand, but we also want to expand that into a PaaS model in the next phase — we then charge a license fee, again, or a user model or a SaaS fee model.

Jay:  Interesting. I like how you define the platform as a service or wealth management as a service, so to speak. I think that’s a unique way of explaining what your company does.

Bhaskar, can you tell us a little bit about your future plans for the coming year? I know you guys did a funding round not too long ago — I believe a Series A. Where are you looking to expand? You obviously have a pretty big presence here within Asia and the region. What are your goals for the rest of the year and looking into 2019.

Bhaskar:  Sure. It’s been a pretty good year. As I said, we have ramped up to over seven clients and looking to almost double that figure after one year. It’s purely around expansion — expansion across the region. So North Asia, Southeast Asia, which is our home, based in the Middle East where we already have clients going live soon.

The second aspect is obviously deepening what we call the product and broadening it in terms of asset class scope and some of the other nice-to-have functionality and basically getting to an industrial scale of being able to run almost 15 implementations at a go. We see some phenomenal demand across the region, across a wide variety of institutions. The whole idea is while we’re running a pretty ambitious end-to-end stack, from a technology perspective also, we still want to continue to be really nimble and run implementations which are less than six months in duration for the first phase at least.

We’ve look at, in the past, when it comes to these big what we call the bandwidth of wealth technology, an average implementation was around 80 months to 24 in some cases. Too long. Sometimes a number of them failed or have huge cost overruns when it comes to launching a new platform to support an existing business model.

Versus, we said that we want to try and ensure that we’re able to launch within six month, and we’ve kind of stuck to that in every single instance so far of launching it within a good period of time, with a certain amount of functionality and then continuously improving on that platform with them. And that requires us to do a lot of changes, ensuring the fact that we’re very microservices, API-based from the technical architecture perspective, ensure the fact that we’re able to build a lot of operations, automation, even more than what we have already.

I loved the conversation which we had with one of our office leads around two weeks back in Bangalore where he said, “In three years I would want to reduce my ops team, potentially, into half and hopefully not have to scale that at all,” because a lot of it can be automated, and we continue to automate it every single month.

Jay:  Yes, it’s pretty exciting, the disruption that’s happening within finance and wealth management. The macro is correct, and it’s right. You guys are aligned perfectly. I think every week now I’m reading another article on Bloomberg or one of these news sources that talks about the number of wealthy people in Asia and the number of millionaires coming out of China or billionaires or whatever the number is now.

On the same token, equally as frequent, I read about how traditional finance is basically a sunset industry, how technology is disrupting everything, and the rise of things such as robo advisory and factor-based investing and systematic investing, like you talk about. I’m excited for you guys at WeInvest. I think that you guys are onto something good, and we’re looking forward to tracking your progress and seeing how you guys grow.

Last two questions I have for you, Bhaskar, and thanks again for your time and for sharing your story. The second-to-last questions that I have is — and I like to ask this for a lot of entrepreneurs — is a piece of advice that you could give to our audience listening in. And this is probably particularly relevant to a lot our audience members because of your background, having had a career touching a lot of the financial services, industries, and then coming out from there and having the audacity to do a startup. And you’re obviously a very well-seasoned professional. You’re not a young kid coming out of college trying to do a startup. So I feel like there’s a lot of people that might be in the shoes that you were in before you started this, had this itch or this desire to do a startup, but they’re constrained by the financial system or by the nice paycheck or whatever their personal constraints were. So if you had one piece of advice you could give to aspiring entrepreneurs, what would that be?

Bhaskar:  One pices of advice. I cannot break it up into three things, but I’ll keep it very crisp if you want. I think the most important thing is to be flexible. We all come out, I think, when we’re thinking about working in a space… We have a certain passion and a certain idea which we think is the next big thing. But I think it’s also very, very important to be able to hear feedback and really go and stress test that while you’re even building out things and while you’re even seeing feedback, to be able to change directions, pivot, add new things, or cut out something which was very close to your heart. That’s maybe been, I think, something which I’ve seen across so many other pretty decently successful people.

The second point I think is extremely important. Please stay extremely frugal. You may be have been bankers. You may have been extremely well former executors but there’s a lot which you can squeeze out of every single dollar.

But I think the most important thing is you really need to ask yourself if you have the right amount of tenacity, because it is going to text you. It’s going to test you emotionally. It is going to test a lot of your confidence, abilities. You may have great contacts, but it’s not necessarily that every single contact or even one of those contacts are going to be extremely helpful in the context of the problem you’re trying to solve. So it’s got to be really tenacious. And just keep plugging on. F**k it, the last bad week, and just try and figure out what you can do the next week to make things better.

Jay:  I actually personally like your second piece of advice about frugality because I think that if you come from the banking background, you’re probably not that used to… You’re probably used to a higher standard of living than most startup founders are. So frugality is obviously a core tenant of wealth building. And, obviously, when you’re trying to build a company, you want to, like you said, squeeze as much juice out of every dollar as possible.

It’s been such a pleasure. Thank you, again, for sharing your story. The last question is simply where can people find you, follow you, connect with you, and maybe learn a little bit more about WeInvest?

Bhaskar:  LinkedIn.

Jay:  Okay, you’re on LinkedIn. Connect with you on Linkedin. We’ll have your profile linked up. And it’s WeInvest.com. Is that right?

Bhaskar:  WeInvest.net.

Jay:  Dot-net. That’s right. Great. We’ll get that all linked up. Again, Bhaskar, it’s been great hearing your story. Thanks for sharing the journey with us, and we look forward to hearing more good news as you guys build out your company. So best of luck to you.

Bhaskar:  Thanks, Jay. I really appreciate it.

Jay:  Alright. Great. Take care.

Bhaskar:  Bye.