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Manulife I.M. expands digital funds platform

The mutual-funds arm of Manulife Group looks to technology to help it mine the insurer’s customer base.

Bruno Lee, Manulife I.M.

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Manulife Investment Management this week rolled out a mobile app in Malaysia, making this the third market in Asia where it is broadening its reach among customers of its insurer parent.

“This is a strategic change,” said Bruno Lee, Hong Kong-based regional head of retail wealth distribution at Manulife I.M.

He says the firm first built an electronic account platform called Invest Choice as a distribution channel for about 100 funds managed by Manulife I.M. and third-party managers.

But how to get these funds in the hands of the 10 million customers of Manulife’s insurance and pensions businesses across Asia? Manulife I.M. currently manages about $15 billion of assets, sourced from multiple channels, but this represents only about 10% of the insurer’s customer base.

Platform and tool

Along with Invest Choice, the firm developed a tool for Manulife I.M.’s mobile app called Manulife iFUNDS. It piloted it in the Philippines and then deployed it last year in Hong Kong. Now iFUNDS has gone live in Malaysia.

It’s a fund comparison tool so users can make informed decisions about selecting funds on Invest Choice – the sort of tool once designed for asset consultants and wealth managers, but with Manulife I.M. now aimed at retail investors and their financial planners or insurance agents.

Manulife I.M.’s app is not a robo-advisor: it does not use algorithms to match investor backgrounds and preferences to a recommended portfolio. iFUNDS could be used by retail investors on their own to buy products, but it’s been envisaged to be used with or by Manulife’s 80,000 agents across Asia.

It does however come with a lot of investment content – videos and so on – with research and market commentary, along with a lot of detail about product performance, risk, objectives, and other selection critera, along with documents, fact sheets, and prices.

“We want to demystify fund selection,” Lee said, “and make exploring a visual, intuitive process.”

Still in the hands of agents

He demonstrated the app to DigFin and it is indeed handsomely presented, although a user would either need good experience with funds or the aid of an agent to know what questions to ask and how to assemble a portfolio.

“This is for people who want a high level of engagement before they buy a fund,” Lee said. “They still want validation from another person, especially when they’re considering larger investments.”

It’s also a tool for financial advisors and agents, although Manulife I.M. has to be careful about who can use it. In Hong Kong, for example, planners and agents need to be licensed by the Securities and Futures Commission in order to sell a mutual fund.

Therefore Lee’s team is selectively working with agents that are accredited to train them on how to use the selector tool.

There is a customer self-service aspect, though. Customers can use iFUNDS to open an account with Invest Choice. Indeed, non-Manulife customers can also join the platform, although Lee says the sales effort will target customers: “We have 10 million customers so why would we look anywhere else?”

But Invest Choice should make it easier for people to get onboarded remotely. They can also select and purchase or redeem funds themselves, moving money in and out of a cash account (operated by a partner bank), and monitor their investments.

Extending distribution’s reach

Although Manulife I.M. has customers of varying levels of wealth, the biggest opportunity is with those who aren’t in the top tier. “Digital is important because this is a volume business,” Lee said.

In Hong Kong the average insurance customer is well off, with accounts averaging $60,000. Account sizes are lower in Malaysia, and lower still in the Philippines.

The complexity of Manulife I.M.’s retail channels means it will have to roll out iFUNDS in stages. These include the customers of its insurer parent; those of its China and India joint ventures; direct fund sales; funds wrapped in investment-linked policies (ILPs); and the InvestChoice platform, which includes funds sourced by external fund managers.

That total is $15 billion (not including the JV customer bases), of which $8 billion is captive customers that iFUNDS can address. The other $7 billion is sold via banks, where iFUNDS won’t be applicable.

The next move is to begin to market iFUNDS to customers of investment-linked policies (funds wrapped with an insurance product). Lee says his team will begin to crack that market next year, starting in Singapore. “There’s a lot of fund choice involved in ILPs,” he said.

The bigger challenge will be how to incorporate Invest Choice and iFUNDS with the parent’s other digital properties. Manulife has online services for its insurance products as well as ManulifeMOVE, a customer rewards and lifestyle app.

Lee explains that Manulife the insurer and Manulife the funds business are different legal entities, so they can’t just sell one another’s products. But he says the ultimate goal is a “holistic experience” for the customer. He notes that Manulife long ago integrated three business lines, for protection, retirement, and investment. Now it’s simply digitizing these, so eventually they’ll be integrated as well.

In the meantime, Lee says iFUNDS has boosted AUM on Invest Choice by a factor of 10 in just the first six months of 2020. “Life insurance sales have always been face to face, until COVID-19,” he said. “Our tool has helped agents continue to acquire customers.”

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Manulife I.M. expands digital funds platform