Tencent-backed Futu hopes to guide Generation Z through the world of investing via its user-friendly, intuitive moomoo platform
The year 2021 began with a huge vindication of the power of young, digitally native investors.
While the lasting impact of the GameStop incident will continue to be discussed through the year and beyond, the more significant trend is the arrival of Generation Z (Gen Z) into the world of investing. It’s no secret that the pandemic has expedited the adoption of technology, even for previously tech-challenged generations. But it has also had a galvanizing effect on Gen Z – those in their early to mid-twenties, who actively seek out tech-driven solutions.
This embrace of all things digital, along with an appetite for risk, has led to the growing popularity of online brokerage and wealth management platforms. The ecosystem too has been keeping pace with these demands. Tech-driven advisory services are gaining in popularity, as exemplified by Singapore issuing four digital bank licenses in December last year. The use of fintech apps is up by 72%.
Coupled with greater financial literacy, Gen Z is now looking at options other than stashing money away in deposit accounts. Investments are seen as an avenue to actively take ownership of one’s financial future.
Capitalising on this once in-a-generation shift in wealth management is NASDAQ-listed and Tencent-backed Futu Holdings. It is building a digital gateway into broader financial services, via its low-cost and user-friendly trading platform, moomoo. After a soft launch in Singapore, it will formally be unveiled in March 2021. In Singapore, Futu will capitalise on the rapid adoption of digital services and a young population that has grown in a technologically immersive environment — expected to form the backbone of the city state’s investing community, going forward.
The moomoo platform was specifically created to help Gen Z overcome the initially daunting aspects of investing. It enables greater control and real-time monitoring, at an inexpensive asking price. First-time users who may not have a huge pool of money, or who are merely experimenting with investments, are a key focus area. Keeping this audience in mind, the platform offers personalised financial plans to reach specific goals. Online broking and wealth management platforms are thus emerging as a better option when compared to a financial advisor.
In an already crowded marketplace, moomoo stands out with its low commissions and seamless investing experience. Compared to its peers, it enjoys a reputation for reliability, security and stability and is backed by a self-developed, proprietary trading system. Besides, its subsidiary Futu Singapore is regulated and licensed by the Monetary Authority of Singapore.
Clocking rapid growth since its founding in 2012, Futu says that its market value has risen to $20 billion as of February 10 2021 on a stock price of USD$154 – a 10x increase on its IPO price of $12 in March 2019. It has allowed investors to trade in major markets like the United States, and in Hong Kong where it is the leading digitalized brokerage. Futu accommodates more than 12 million users from over 200 countries and regions.
Citing unaudited figures for Q3, Futu said that its total revenues had increased 272.1% YoY to approximately $122 million (HK$946.2 million). Its total gross profit registered a 314.1% rise YoY to around $98.5 million (HK$764.1 million). Its paying client base grew by 209% in Hong Kong, a quarterly high since the listing of Futu.
The daily average client assets stood at $23.2 billion (HK$180.3 billion) in the third quarter of 2020, an increase of 152% from the same period in 2019, equivalent to approximately $55,465 (HK$430,000) per paying client.
Investors on the platform can now make use of a simplified process, leveraging moomoo’s accessibility, data options and low commissions and fees. There is a zero-entry cost to acquire Level II market data, reducing friction while accessing global investable products.
Through its wide product offering including in-depth and customised analytical tools, moomoo hopes to grow a community of like-minded investors that diversify and stress test investment ideas through informed decision-making. The platform has seen a surge in online trading through the coronavirus pandemic, as retail investors actively traded equities while stuck at home during extensive lockdowns worldwide.
With Generation Z now prioritising financial independence, this platform takes them a step closer, while allowing them to explore the totality of their journey in this space.
This article was created in collaboration with Futu Holdings. Users who sign up for moomoo before March 8 2021 will receive a welcome bundle worth S$180, along with free level 2 market data for the US market, a free AAPL stock and commission free trading in the US and Hong Kong for a year. To register, please visit the official website