Get to know Kelvin Lei of Aqumon as he talks wealth management, key investment trends and the best advice he has ever received

As the former vice president at Deutsche Bank Hong Kong, Kelvin Lei is well versed in matters of money. After leaving the corporate world behind in 2015, Lei took his years of experience in banking and finance and set out on his own with one goal in mind: to empower those “underserved by traditional private banks” by bringing the power of investing into the hands of everyday people.

The Wuxi-born entrepreneur, along with his friend, financial mathematics professor Don Huang, co-founded Aqumon in 2015. They created a full-service wealth management app with robo-advisory—algorithm-based investment advice—to make investing easy and accessible to all. Despite having no office and no funding initially, the duo set up shop at the Hong Kong University of Science and Technology (HKUST) library, developing algorithms and fundraising strategy before officially launching the app in 2018. Today, the fintech company has more than 100,000 registered users, lists heavy-hitters like Alibaba’s Entrepreneurs Fund, Lenovo and HKUST as shareholders, and last year won the eDigest award for Best SME Business. 

The father of two talks to Tatler about key trends in wealth management, why saving is not enough and his biggest career failure to date.

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How did you come up with this app? 

Finance was a path I always knew I’d be on since I left university. My career led me through different posts in renowned banks and I ended up in the fixed income and sales and trading team at Deutsche Bank. It was a very lucrative business until the financial crisis. That was when I realised the banking industry’s policies were not always in the interest of the clients. In fact, I personally found it very difficult to invest in other products as a retail investor. That was when I realised there’s a market for digital, algo-driven wealth management products. I wanted to create a way for anyone to invest. 

What is the goal of the app? And how does it benefit the consumer?

Traditional wealth management advice is offered exclusively to the wealthy and privileged few. We want to make investments simple, affordable, transparent and accessible to everyone. Our mission is to transform the financial industry by empowering people to participate in wealth creation and bring about real social progress.

What kind of services do you provide?

Aqumon has three different business lines: robo-advisory services for retail clients, asset management for professional investors, and institutional WealthTech solutions. Aqumon has partnered with more than 100 financial institutions in Hong Kong, mainland China and overseas, ranging from banks, securities houses and asset managers.

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Above (Photo: Affa Chan/Tatler Hong Kong)

What are some key trends in wealth management?

Diversification of investor demographics and investment strategies. Investment is no longer solely the realm of high net worth individuals and younger clientele are now playing a key role in driving the industry. Three-quarters of Aqumon’s user base are 20 to 39 years old. Female users aged 30 to 39 comprise more than double the number of male users in the same age group. Most users are employed, white-collar workers split equally between financial and non-financial sectors. Potential investors also found that the current version of robo-advisors offer longer-term, stable and diversified investment portfolios, matching the needs of consumers who are starting a family in particular.

Banks are further embracing fintech. More banks are adopting AI robo-advisory technology to save labour costs and expand on offerings. Aqumon partners with large financial institutions such as CMB Wing Lung Bank, AIA, and BOCI, which have the customer reach and resources to lead this industry transformation. Last year, Aqumon also launched the Aqumon Smart Fund, a SaaS (software as a service) platform that helps financial institutions select superior mutual funds. Within the first month of launch, the Smart Fund product attracted more than 10 different clients across the region, including ICBC Asia. In 2021, 20 projects are in the pipeline.

Asia continues to ramp up research and development (R&D) talent development to support fintech growth and China now leads the world in annual R&D spending at nearly US$275 billion, while Japan, South Korea and Singapore also invest more than 2 per cent of their GDP in R&D, according to Forbes. This is reflected in the fact that 80 per cent of Aqumon’s staff came from R&D, algorithm and physics backgrounds, and in the company’s plans to hire more staff over the course of its expansion moving forward. 

What are three money management tips you think everyone should know?

Saving alone is not enough to grow one’s wealth. To achieve financial stability, one must stay ahead of inflation and start investing. 

The three golden rules of investing: 

  1. Diversification
  2. Global asset allocation 
  3. Long-term investing

We can look to Gamestop as a recent example. It may be exciting to chase the market and speculate by buying a singular stock. However, just as we saw last week, the markets are volatile. Ultimately there are high gains but also high losses. For retail investors who do not understand the market as well as the professionals, single stock investments leave them exposed to high risk, hence we always advise people to diversify—even if one sector may be underperforming, your other investments will make your portfolio much more resistant to market volatility.

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What makes this app better than going the traditional route of hiring an actual wealth manager?

I believe in robo-advisory services as the future engine of financial services. Compared to traditional modes of operations, the Aqumon app can lower costs through automating the labour intensive and time-consuming operations. This cost deduction benefits our end users directly. The minimum entry amount required to use robo-advisory services is much lower than the amount required by financial planners. Additionally, thanks to automation, robo-advisors have a much lower advisory fee (usually less than 1 per cent).

Secondly, through quantitative strategies, we are able to drive disciplined investment behaviour and provide better risk-adjusted returns. The big data-driven approach allows us to assess and analyse vast amounts of information to look for relevant factors to make informed investment decisions.

Thirdly, the app makes the investment experience much easier and intuitive. Investors are able to get access to their portfolios anytime, anywhere via mobile phones or web applications. Furthermore, we offer full access to portfolio management tools, offering more flexibility to users.

Can the app offer advice?

Yes, the portfolios are all constructed based on our customer’s risk profile. By answering an online questionnaire, robo-advisors are able to understand the clients’ degree of risk aversion, financial status, industry and geographical preferences. Thereby we can construct and recommend optimal portfolios based on investors’ preferences by following Aqumon’s quantitative investment strategies.

What is your favourite part of your job? And least favourite?

My favourite part is being able to come up with new solutions to meet the constantly evolving needs of society. I really enjoy being of service to others and driving actual change. I would say the most challenging part is the repetitive pitches for new investors.

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Above (Photo: Affa Chan/Tatler Hong Kong)

What are your hobbies outside of fintech?

I enjoy basketball and spending quality time with the family and kids. Time is very precious when you’re starting up your own business. Apart from working, I enjoy watching sports such as UFC and cooking shows on YouTube.

What has been your biggest career failure to date?

I got laid off at the bank I was working at, but I’m grateful for the experience as I learnt that I’m not suitable for the corporate world, and it launched my career as an entrepreneur.

What’s the best piece of advice you’ve ever received?

It’s the 20-hour rule. When you want to fully understand someone, you should spend 20 hours with them. Our advisor and friend Fritz Demopoulos gave this invaluable advice to me when we first started out with Aqumon.

What would you do in the event of a zombie apocalypse?

Most likely be with my family, holed up at home with enough food from my favourite grocer Oliver’s to survive for a decade.

How can someone tell if you’re having a bad day?

Very easy: I’ll wear my sunglasses at work.

What would your friends say they like the most about you? And the least?

They say that I am very funny with an easy-going personality. Sometimes I can get very caught up in my work and can easily forget things. 

Tell us something that’s true that nobody else agrees with you on.

I am impeccable at speaking Cantonese and have the best haircut.

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