Ep 42: Wai Ken - Country Manager, StashAway (Malaysia)

Wai Ken Wong: I think what the rich know, and therefore it's something that they see is that they have more options to invest their money and more money is being thrown at them and given to them, for them to use because they are such good customers in the eyes of the banks that they get faster accelerants to reaching wealth.

So for example, if you're a wealthy individual and you make a million a year, you pay a certain amount in context and you follow the same schedule as someone else.

You follow the same schedule as someone else. But in the thing that sets you apart is investing so rich people invest in a way where they actually get very little tax in terms of capital gains, because in Malaysia there's no capital gains. So people really need to think about getting into a mode where they can actually invest.

Whereas rich people actually get a lot of options to invest and actually see more trends to invest and actually get given more money to invest. And because of that, they race ahead and it's very hard to catch up, but it's not too late to start.

Ling Yah: Hey everyone!

Welcome to episode 42 of the So This Is My Why podcast. I'm your host and producer, Ling Yah, and today's guest is Wong Wai Ken - the country manager of StashAway - an intelligent wealth management platform that currently manages over $1 billion worth of people's life savings and it's also the oldest robo advisory in Malaysia.

In this episode, Wai Ken shares how he first got into the world of investments. Starting from his childhood, when his mother would encourage him to use his angpow to invest in unit trusts to how he went from Khazanah to Affin Hwang and what convinced him to join a then two year old startup called StashAway.

We dive deep into what it's like being the country manager, StashAway's value proposition, how it came up with his risk index, why it doesn't invest in crypto, what he thinks the rich know that the poor don't and so many other things.

So are you ready?

Let's go.

Wai Ken Wong: I think like any other KL, Malaysian Chinese person is fairly middle class. I remember it as being very busy. My parents would get us involved in a lot of things.

Go to tuition and piano class or sports or drama class, even computer class and English enrichment. So every single day was packed.

When I look back there were things that I really, really enjoyed doing.

Ling Yah: So would you say that your mom was quite a prominent figure in your life because she also was very much teaching you investments when you were young. She was like taking your angpow and telling you to start investing at a young age.

Wai Ken Wong: So obviously I think both my mom and dad had a lot to impart just in different ways in their own style. My mum is definitely more vocal. My mom is more driven and she's more extroverted as well. She was the first one in my family to get a scholarship, to go and study education, to be a teacher.

She was an English teacher at the time. She was all about education. So she kept saying around the dinner table, like how education is the silver bullet. You can free you from the poverty circle. It can elevate you. You can get exposed, can travel the world. Education is everything. So as kids we just took it for granted that education was everything.

She had a successful English teaching career. She thought like, there's no way I'm going to raise three kids with her aspirations of sending us overseas on a government salary. So she started selling unitrust and unit trust agents, if you do well, you can actually own a lot of money.

And back then unit interest was a very hot thing.

So apart from the stock market, the only way to invest with unit trust. So this was the mid nineties and not a lot of liquid investments were available. So that's what she did. She would visit a lot of high net worth clients and successful people.

And every time she comes back to the house and she would have dinner with us. She would always tell us about all these successful people that she met and how they were successful. How they got to where they work.

And then during Chinese New Year, sometimes we will visit them as well. And their houses were always like so lavish and they live such an amazing life in all these gated communities.

So early in life already had that programming that you have to make it. We've set you up for success and you have to one day be like this in some way, shape or form. And success was what was built into us because it was something that they invested a lot into us and kind of expected us to succeed.

And at the same time, they actually balance out of pressure quite a lot. So they didn't push until the breaking point. They just expose us a lot. And that's where I guess my dad was very, very helpful where he's extroverted, but he's only extroverted at work.

So at home, he'd be very tired he would work for you would be a managing director for a property development company, but he would come home, be very tired and then have dinner with us.

And then we would just go watch TV. And then he would make sure we exercise, always go to the club and swim and play badminton, or run around the club, give you good cardio. He balanced it up very well.

But then I think the big thing is that my mom would say like during Chinese New Year, like give me your angpow and I will invest it for you.

And then she would show me the balance. The balance more often than not would be, would be positive. So it's like, okay. I didn't think much of it, but I just thought, okay, it's safe. But I always knew that one day I would break the piggy bank and get at it. So

Ling Yah: I believe you broke the piggy bank for your wedding. So that was quite a long investment.

Wai Ken Wong: It was very useful. And I really do believe that money should be spent on things that are useful to you and things that bring you great joy. So I don't really believe in hoarding.

I'm not that tight with my money. So ultimately when my wedding rolled around it was very natural for me to say, yeah, I've invested for ages.

My wife and I both chipped in and it was completely self-funded and that felt very good. Because we didn't have to ask parents for money or even worse, take a loan, you hear stories, put it on a credit card or whatnot.

So we did okay.

And a pro tip to those of you who are looking to get married, let your parents invite more of your friends. Their angpows tend to be bigger. So all my friends all angpow very slim, angpow all on diet, but my parents, all the uncles and aunties had very, very generous angpows. So let your parents invite their friends.

Ling Yah: And so when you were 16, you moved to Australia for your studies. So what was behind that move?

Wai Ken Wong: Yeah. So again, the recurring theme of education is everything. Obviously it's very difficult to fund a completely international uni program for three kids.

And at at that time as I'm sure with a lot of Chinese Malaysian people, they just don't know what the future of nature holds. So it's like, Oh, let's send our kids overseas and quote unquote, give them options.

I believe it was motivated purely by education by the back of their mind, they would be like, okay, in case Malaysia goes down the tubes, at least they can live a good life in Australia.

So like clockwork, when we were 16, they will send us overseas and they would actually prime us beforehand. So first they told us maybe when we were in secondary school, like, okay, one day you're going to go. We didn't think of it because it's like many, many years away.

And then one day we just went there on a holiday and then they say, well, one day you would stay here. Wouldn't it be nice. And then another year later it's like, okay, you need to go to Australia to sit for a test. So you can get into this school then became very real after they said, oh, you've been accepted into these schools, which one you want to go to.

At 16, my sister already was there for a year and then I joined her and then two years later, my youngest to join me. And three of us lived in a house a condo in Chatswood, in Sydney. Lovely neighborhood, a lot of Asian food groceries around.

And then that's where we learn how to be independent. You cook for yourself, you came for yourself, you balance your school and your study. And at that point being so straight already, you would never even think of having parties in your house because you are the one who has to clean it up later.

We were more exposed. We understood that you can still live a good life, but work very hard at the same time, you don't need to work nine to five until you die and have nothing to show for it.

Ling Yah: Did you have a clear vision of what you wanted to do?

Wai Ken Wong: Not at first, but when I was at school going into uni, you kind of have to know what you're going to study. So I knew that I wasn't going to go to things like law, you did, or maybe medicine like Dr Jason Leong, but in high school, I did this program called young achievers.

I wish it upon everyone because it's where they get a bunch of high school kids.

And I made you set up and run a business. And I remember just loving the whole experience because it was like, wow, we got to conceptualize something. We have to raise money. We got to convince our friends to buy our wares. In that same vein, you got to go through difficulty, you got to drive towards target.

So I love that whole business arena. And I was like, where is this in Malaysia? Where's this whole glorification of science. This was like to me, very, very wrong. So going over there and discovering like, it was like coming out of the closet. Like, I love this business. And like, to which I'm sure a lot of Chinese people would have gone, like, yeah, you're Chinese, of course you love business, right.

But like back then you was like, Oh, you should do something science related, like be an engineer or be a doctor. I just didn't really fit that mold. So I came out and I loved business. And from then on, it was just, let's do it now. Watch wall street, and then false idols, like golden gecko and all that was so cool, right. Let's be a master of universe or whatever, so fanciful.

And then when I went to uni, it was all about finance. It was about commerce and economics. And I loved it five years in university of New South Wales. Not just studying, but also working at the same time in finance. I really loved that, phase of life as well. Very, very immersed in what I call it back then, my passion, which is also a big buzzword back then.

Ling Yah: So you were never struck by that kind of go to the university. Let's drop out to do a startup dream.

Wai Ken Wong: I, I think although I did, my mum did make me read a book by Richard Branson. Called losing my virginity. And it was all about him dropping out of uni and being a founder of a whole bunch of businesses.

And I remember telling my mum like, yeah, if I just drop out of school, then I could like do this business thing and then actually just laugh. And then I went to a doctor with a one day and young man, what do you want to do? I said, oh, I want to drop out of school and start a business. Right. So it's like, oh, okay.

At least I have some jokes, but it's not realistic as a person that is so conditioned to go into a career that wasn't something that I ever wanted to pursue.

But I do think it is for some people, if you have role models, if you have the opportunity, jumping out and doing something is definitely possible.

I don't do it because of the romantic notion of just being a Zuckerberg or whatever. It's more often than not. There are different ways So, no, at no point did I feel like I was gifted enough to drop out and do something.

Ling Yah: And you mentioned earlier that you were doing multiple jobs while you were at university.

So you were at three different places. I think the Research Premium China Funds Management, university of North Carolina and also HSBC. So was this like an intention of, I need to supplement my life or was it just, I need the work experience. What was driving you to work throughout your university?

Wai Ken Wong: Yeah. I enjoyed working because in my high school days I had some really fun on jobs.

When I was studying, I was asking my friends like, Hey, don't really seem like you're studying. Like, what are you doing? He just said, oh, I work in this cafe. And I get like 15, 16 bucks an hour to me that was like, wow, that's so much money.

And then I say like, yeah, if your cafe needs another pair of hands, let me know. So I did my stint plate washing, not very good, but I did that for a while. It's not that romantic, trust me, but my next odd job was actually really, really cool because at that point I had started to drink whiskey already.

I loved single malt and I loved kind of trying new things.

And then at uni, my friend said, oh, you love whisky, right? Like I have an uncle that's starting a pure whiskey bottle shop in Australia. A really fancy part of Sydney called Double Bay. And if you want to join him, he's really keen to get a 4 star.

So I joined him and I had so much time, so much fun. I got like 21 bucks an hour just to sit there and learn about whiskey, listen to jazz and tastes and talk to suppliers, talk to my bosses about whiskey. It was so fun. I, so I knew that I liked working, but I knew that whisky was just a hobby.

It would be a hobby that will land me in a lot of good places, actually whiskey has been good to me, but as a Chinese guy from leisure, you're not going to be like, yeah, I'd want to do finance anymore, right. So in uni, I knew I liked to work. I think the drive to work at uni was actually the first week I went to accounting 101 and then I saw a room full of like three, 400 people.

I was like, wow, I didn't know. They were churning grads out like this on an industrial scale. It was University of New South Wales in Sydney. So there were a lot of Chinese people from Hong Kong, from Singapore, a lot of Malaysians. And obviously they're all Asian and they all look like me.

I'm like, I have nothing above these guys. I've met Chinese people like proper Chinese people in, school. And their intellect is amazing. No need to talk about the Singapore and no need to talk about the Hong Hongkies. They're all up there. So as a average, academic guy, I went, okay, I need work experience to supplement what I do.

And to give me that depth, because there's only so much books can tell you. So I pursued an accounting job. Got it. I remember it was a cadet ship, which was meant for people to study part-time and work part-time so it was great. And I remember the princely sum of 28,000. Aussie dollars a year.

And I felt like I'm the richest man in the world. 28,000 a year. Imagine converting that to the Ringg it. You'd be so wealthy. But later you have to pay taxe s, and then you spend, and then like, you don't really get that much at the end. But like when I was signing, I'm so happy.

That accounting was so boring. And to all those who will want to dream about being an accountant, don't let me get in your way.

It just wasn't my thing. I remember one day, I was doing an audit and literally I was just ticking boxes. I was like looking at their receipts, looking back at my spreadsheet, putting a tick, looking at their spreadsheet. And I did this for like days on end and I felt like a robot, right.

But obviously as a cadet, as a lowly accountant, that's what you were meant to do to drive that discipline, to have that attention to detail, which I don't have. It was just like, man, this is really not for me. And the moment I tendered was I went to nightclubs. I saw this other guy in a suit because I had a student as well.

I spoke to him and he said, he said, oh, I worked for a funds management company. And we distribute funds that invest in China. And I was like, oh, that's so cool. Like, what's it called? And told me the name of the company. And he said like, you seem like pretty decent guy. Why don't you show up for interviews, like we're actually hiring analysts as well.

So I went to the interview I think I did. Okay. Oh, I remember it was a group interview, and I remember the other candidates not being as vocal as me. So I just try to talk so much in that interview. I tried to crowd them out because it was a group interview and in the end they told me I got it.

And then I was so happy when I tendered from my accounting job, because I felt very happy knowing what I don't want to do. So then I spend time also working in funds management, which was terribly exciting because China was just hitting its stride posting 10%, 10%, 10% a year. Like clockwork. Like they all cooked the books, but back then it was a very easy pitch.

China's doing amazing. The stock market is just getting started, the valley is going on. We had this famous CIO called chatting height, value partners, actually Malaysia , by the way, from Penang, whose fund w e were distributing in China, in Malaysia. He's trying to find what's being distributed by us in Australia.

So it was a really good time leading up to 2008 and then 2008 came . And 2008 was scary for so many reasons.

Market was tanking. We were worried about whether there would be banks the very next day or not. We would be worried if the stock market could even exist or not. And that was a very scary prospect.

Being in finance, loving, finance, having the passion and to see all these institutions, crumble was very scary. Like you feel that pit of your stomach, like you don't know what's going to happen. And I still remember that feeling because that informs me whenever we are in a crisis, that feeling is really there.

So I learned so much, I saw so much and where my friends in that same kind of accounting class three years later were asking, Oh, where do I intern now? I could actually just go like, ah, you guys have no idea. I'm already been working for two years and it's pretty ugly out there. So good luck.

I was, I guess, pretty full of myself, but it was true because they had no idea. And I was in the thick of it when China was also giving back a lot of its gains. So ultimately for my last year of uni, I said to myself, okay, I've been working for a while. I want to be a student for a while.

things were getting difficult at work. I had a very Chinaman boss. And being Chinaman boss, they treat you in very strange kinds of ways. So while I was learning a lot, I didn't really like the ethics of the company. Nothing that it was wrong, but it was just how they treat employees.

And I didn't like that ethic. So I left and I went back to full-time study and I said to myself, let's just have fun. And that's where the university of North Carolina came about. I did an exchange and I loved it. It was so fun actually being a student and being in America, they were like, Oh my God, I love your accent.

Cause you had to Australia accent, I never felt like I was ever exotic, but when you go to America and of all places, North Carolina, which, which is very, very fun, it's just a campus town, small, small town, everything is exotic, I guess.

Through that experience, I also got to travel the States and also got to surround myself with very, very smart and very social people.

And I loved it. And then I came back to Malaysia, did a stint with HSBC and that's where I would meet my future boss from Affin Hwang. And then I finished off my studies and yeah, that was, the whole uni wrapped up, but very, very rich career and professional experience along the way as well.

Ling Yah: So were you very clear that I would definitely come back to Malaysia after graduation?

Wai Ken Wong: No. No. I think as a Malaysian who's made it overseas. You have all your talking points about why coming back to Malaysia was the wrong thing. And every time you would come back to Malaysia for your holidays, you'd be like, yeah, this is why I left.

It's just a mindset. It's not because Malaysia was in deep trouble. All you need is one thing to change it, right.

And in my case, it was a couple of things. I actually came back. Worked at HSBC for my future boss, Joe Johanne.

And I was like, wow, this is a good life. If you work and you earn and you go out and you can experience like, good life, this is fun. there's absolutely nothing wrong Malaysia.

And then when I was looking for jobs, Khazanah came and they came to our uni and I quickly researched what Khazanahwas cause I didn't know.

And then obviously I show up fully prepared. And I really liked the idea the idea of Khazanah. And then they would have, first of all, will come back to me to say that you've been accepted.

So in that sense, I didn't have to really search super hard for jobs in Sydney. So I came back straight away and that's how I got started back home in KL.

Ling Yah: So what was the idea about Khazanah that you liked so much and was working in the investment team, everything that you thought you would be?

Wai Ken Wong: It was and it wasn't.

So the thing about Khazanah is that it plays a very important role in Malaysian corporate life and in the politics of Malaysia as well.

So as a sovereign wealth fund, it is a steward of all the national assets that we have. So name any big GLC, and you would probably have an ownership stake in it. There would be really, really great companies that it would own like Telekom and CIMB and things like that. But they would also be companies that would be burning through a lot of cash.

Things like Proton, Post Malaysia. And so Malaysian airlines, companies that it's divested or thought about divesting it many, many points in time, but it never felt like we were not doing the right thing. So at that company, you always felt like the fate of the country and its assets on the line.

That's why this process was so important. That's why you have to be so careful. That's why your work has to be of such high, high value. And very little would be tolerated. Just dressing sloppily would not be tolerated. Manners, how you write your papers. Everything was very, very strict. So that's what I felt working there.

And I felt like I wanted to do more transactions, like do more quote unquote deals, but it was also a matter of luck, which teams you were put into, which would actually do these deals or not. So sometimes I felt like, oh, if only I had more deal experience, I would have stayed a bit longer.

But I went through different industry sectors that didn't really do a lot of deals, but what they were trying to do was to operationalize companies that they had already invested a lot in. So that's a different kind of skill to pick up, which I did not appreciate at the time. Very, very important, more important than doing deals, in fact, because that's where you already own the baby.

And you're trying to raise the baby and give it all the good things in life.

But at that point I was just not switched on to that kind of operational mindset. I always felt like as a pseudo investment banker in my head, I was like, I was looking to do deals, but I did manage to do a few deals, but also to be exposed to some very interesting situations.

in my first year I was exposed to the creative and media landscape and Khazanah had invested in Pinewood Iskandar S tudios, Malaysia in Johor. And I learned about the business of movie studios media.

It was partially, and you can see them walk through the Palm oil trees in all the roles.

And then you thought like, huh, in ancient, Mongolia, this is what he wants, obviously that's true. Okay, cool. But it was a landmark series for us to be, say, , Pinewood Iskandar is finally on the map, to learn all these things. Very, very interesting. And I moved on to the leisure and tourism side where we, invested in hotels and theme parks.

And the business of leisure is actually very, very difficult because the end product is fun, but to make it fun, you're operationalized. The operationalization has to be so flawless, that the customer experiences nothing but fun.

During that whole time, it was very, very eyeopening to see how we would invest and how we would choose to add value to these companies.

And yeah, to this day, at least, if I look at a few of the sectors that I touched before at least I understand a little bit about some businesses. That was really fun.

I think ultimately at a place like that for a young person, they would give you a very specific task to do, and they would expect that of you.

And that's what I felt was the push factor for me.

You have a feeling already after a certain amount of years where you're like, okay, I'm out. That's what I started texting my old boss again from H SBC, who had moved on to Affin and Affin was doing very, very interesting things in the market, like looking at possibly merging with Hwang. Hwang DBS at the time.

So I had my conversations on the side and the moment the Affin Hwang merger was in the papers, I then tendered at Khazanah and told my old boss out be able to join.

Ling Yah: Were you working with Dato Hisham at the time?

Wai Ken Wong: Yes, actually he was one of the executive directors who oversaw the Iskandar region, which was one of my portfolio sectors as well.

So during that time there was a lot of investment in Iskandar. There was a lot of different interests going to it, the Japanese, the Chinese, and we were trying to do things that we felt made sense and could also add value to our other parts of our portfolio.

Iskandar itself would be instrumental in the real estate part because Khazanah owned UEM. And it'd be interesting to the leisure side because we had experienced running hotels and theme parks and that's where local land and the dishonorable hotels would be.

So yeah, Hisham was there. Hisham was a drill Sergeant who would be glad to be referred to as that.

I think he has a very militaristic Sun Tzu mindset. He would always drill into us, must study evaluation. You must study evaluation. You must focus on this. Cause he's the NYU professor of evaluation and corporate finance. You have to understand this. so that's what I learned in my time with Dato Hisham.

Ling Yah: So you moved to Affin Hwang and I believe you were involved in that post merger integration. You were involved in quite a few big deals.

There was also the IPO of Serba Dynamik Berhad as well. So what were the highlights if you will at a time for you?

Wai Ken Wong: Yeah, going over to Affin Hwang was like a quote unquote big fish in a small, pond and little did I know I would also then go to StashAway, which is a much smaller pond.

But I think in a small point, you can learn a lot and you can make your skills be very valuable to the organization. So coming from Khazanah, where I was in a big pond and there was a lot of talent there, it was very hard to stand out.

At Affin straight away, working with my my former boss , Johan, it was very clear that Affin was a different type of organization.

I immediately got access to the C-suite to forming and executing a strategy for the organization, which sounds very interesting. Sounds very sexy at that time.

And when I went over, we were just in the midst of finalizing the merger. So at that point in time, what was very clear to us was that if we did not have a strategy, and if we did not execute well on this strategy, the value of the merger would disappear.

They were these mythical creatures called synergies that you would need to capture in the first two, three years. Otherwise the business would kind of revert back to the normal, and you would not have captured these synergies. And you would be very hard to justify having done a merger in the first place.

So at that point, there was a great sense of urgency, and it was a great sense of transformation because Affin, a very GOC kind of organization was going too much with one very entrepreneurial kind of like Chinaman run company.

And together we will be this boutique investment bank that was scrappy and could win deals and finally make its mark on the league tables.

So that was the feeling at that time.

And I went into it with a lot of energy. I helped my boss at that time, Johan, recruit a team of three other people to help, to form their strategy office to then work with consultants at that time to, form and then implement the strategy that we have formed.

That was a very, very interesting and a lot of learnings from that as well. Like what is good strategy? What is not good strategy? And after doing two years of that, when the merger was already nicely sewn up and it didn't feel to me, like there was a lot of stuff to learn because that momentum of that initial merger had now been business as usual because we had done what we needed to do, or we had kind of come to terms with the things that we could not do.

And then it was very BAU. So to me, I was less motivated and I was always looking for that new high and I then transferred laterally to equity capital markets to, like you said listed different companies.

Including Serba Dynamik, including at the time called MIA equipment. Now called MI Technovation or unless they've changed the name again, I don't know both of which since IPO I've done very well. If I just had bought stock on their first day of their list that I would have, I'll be very, very wealthy, but I didn't. But yeah, it is very, very interesting to work on transaction.

So like this combination of working part-time as an accountant and then in funds management, and then Khazanah as a sovereign wealth fund company and then transitioning to corporate strategy, and then finally I could be an investment banker. I said that I do deals and it was fun doing deals, during the PD pitching for deals, actually winning them was a real delight, , working with a very small, but very tight team to achieve something.

To kind of see a company through to listing day was an achievement in itself and we call it exposure to great entrepreneurs to see how well they positioned our business for growth.

I was actually very happy doing deals like that.

I think if StashAway didn't come knocking, I would have stayed there for another few years easy.

Ling Yah: So what happened? Because I'm sure joining a tiny startup, only two years old at a time was the last thing on your mind.

Wai Ken Wong: It was.

To be fair, these weren't big deals. They were just big deals for Affin because they would be like our first mid cap IPO and things like that lead role. That's what big menat for us, but I was very happy.

And I remember that point in time, a few of my friends started to leak away into the digital or startup space.

When you go to a family gathering and it's like, Oh, what are you doing? What are you doing? And like, Oh, I'm working with Shoppee and they're posting me in Vietnam or Philippines or whatnot. Okay. That's interesting. Like in commerce key, whatever. Now you meet people like, Oh, I worked for Uber. Someone actually LinkedIn me and said like, do you want to join Uber?

And I was like, nope. I don't know if this will fly. I don't know what it is, but yeah, not for me. And then you saw people like join my taxi, which obviously led to become, grab and see people join FinTech startups that my friend Wilson Bay on policy street. Who went on to found his own company policy street with two other co-founders.

I still had my head in the sand. I was like, no way that these kinds of things would be lucrative or something for a long-term or something that I would ever want to be part of because the business of startups at that point to me, the wrong perception was that it was all about hype because it was like, what's so fashionable about going out there, creating a business model and burning cash and hoping that one day you'll become a monopoly.

. And then obviously list and all that. I just didn't understand, like where's the fundamental to this . Just was too much into traditional finance. . But once I understood that being in a startup and creating value and getting into monopoly means that you are creating value just down the line and actually with, good business discipline, you can actually make money.

A lot of companies have since made money, the likes of Facebook and Amazon , they now make money. So I slowly learned that that was possible as well. And I didn't think that it was a career for me because I just didn't see something that I liked. I didn't care about. E-commerce I didn't care about ride hailing.

I didn't care about InsureTech and FinTech was a buzz word at the time. So it all came down to luck, really. Working in banking, I like wearing suits and I like wearing shirts, tailored shirts, and I was shopping online and lo and behold, there was this company called custom tribe, which made tailored shirts.

I bought those tailored shirts, love them. And I wrote into the support desk and said, Hey, I love your shirts. And the guy responded to me and said would you want to go out for lunch? Because I think I would learn a lot from a customer and a user like you, what is important to you? So I met Johan who actually was the founder of custom tribe.

And he said what is important to you as a customer? And I said, what's important? Fit. Fit is everything. I don't care if you have 10 SKU, blue, yellow stripes or whatever, I just want nice white shirts, which have very good fit. And then we talked about everything, like the thickness of the cotton and I would tell him, like, the buttons are very tight to go into these holes.

Can you give me slimmer buttons? And then he would say, what if I made the hole a bit bigger? I'm like, yeah, that works too. It was like that. It was that kind of relationship was quite fun actually.

But then his business didn't do very well and he shut shop and he went to Singapore to join a venture capital company.

And while I was happy doing my pitch books and doing IPO's, he WhatsApp me and say, Hey, I just met this really interesting company called StashAway. The founders are really amazing. And they want to expand to Malaysia. You're a finance guy, ? Like, do you think you want to put your hand up for the job?

So I remember not answering him cause I remember not registering what a stash away was and what a FinTech was. So I was just like, not really my thing. So I didn't respond. And two days later he said like, I'm serious. I just send me a CV. I can just forward it to them.

So I was like, okay. It was just out of respect for my friends.

I looked it up especially in Singapore and I was really wowed by the website. It was very beautifully designed, but that was a logo that Vita Montreal, Tokyo, Singapore, which I went hey this is a startup, but it's regulated. And not only is it regulated by whatever, it's regulated by the MES. And MES has very, very high standards.

So I did more research. I was like, Oh, it's a robot advisor. It puts together ETFs to form portfolios for you to invest outside of Singapore or outside of Malaysia. That's really cool. Oh, you have a mobile app as well. Why don't I download it and try it.

By the time I was already sprucing up my CV, I sent it to you Ehon.

And when I had that first conversation with Miguel later, the co-founder and the CEO, he said to me, Oh, your CV came highly recommended by this VC. Oh no, no, no. It's my good friend who works for this VC. I don't know them that well, but you see, you know, just like by fate manifesting in the ways that fate manifests you getting in the door is very important.

Obviously staying in the room is completely different, differentEhon and that nice opener about being highly recommended or whatever was a really cool way to get into the door.

I like to think I've done things since then to stay in the room, but as origin stories come that I thought lady luck had a big part to play and still today, I mean, you home meet every time I'm in Singapore and be like, Oh, that was just so, so crazy.

Ling Yah: And what was it about stash away or maybe your conversation with Michele that convinced you to jump to StashAway?

Wai Ken Wong: Yeah, so I was pretty much sold by the time I spoke to Michele, because of three main reasons. The first thing was that I felt that they were very legit. It was not a hope and a dream.

They were a legit regulated, licensed company. In Singapore, which is not easy to be regulated, very, very high standards. And then the second thing was when I downloaded the app, I started to use it. And I felt like this app is beautifully designed and I love using it. And even if I didn't join StashAway, I would use StashAway.

So I felt like if I could join StashAway to help them build a business around this great product, I think there'll be a lot of promise.

The third thing was the people, because before meeting Michele, I spoke to the head of HR Siew Yee, and I got the sense that she was really, really warm, really lovely, and that everyone in StashAway would be like that too.

And I was not wrong. Everyone is actually is like that. Very, very smart, very, very high IQ and just nice people, which is sometimes hard to find in a high IQ environment. So I was sold, like I spoke to the CEO and Michele is the CIO, Freddie, and Nino to CTO. And all of them had the same vibe. The DNA was consistent.

So the people really sold it for me.

Ling Yah: Was there any like hesitation because I listened to an interview that Michele did on Clubhouse and,he said that when I was trying to raise capital 2.3 million, spoke to 125 investors, 124 said this will not work.

Wai Ken Wong: So that hesitation I guess was already behind him because they had already raised Series A by the time I signed.

So of course I did have some doubts, but the doubts were very quickly ameliorated because he said at that point in time, and my candidacy was, almost confirmed. He just said in confidence that, yeah, it's looking good and we're able to raise, so it shouldn't be worried about that at all.

And it just gave me the confidence to, join them and to, help them launch.

So ultimately it just came together. And obviously since then, we've raised series B and a series C and we're doing very well as a company. So I feel like two and a half years ago, it was luck that, got me started.

But I guess I had a decent checklist as to why I went to join StashAway, but I'd like to think that there was some good execution in the last two years, two and a half years along with some lack of cost markets, wily beast, but, well, I guess we don't have luck because we have grown acorona virus, terrible markets, but the markets recovered and our portfolios did well.

So that's an element of our CIO's skill involved as well. And we've done very well. And I like to think that that Malaysia is punching above its weight in terms of its contribution to the group. So the journey continues and long, may it be fun?

Ling Yah: So let's linger a little bit on those early days because you joined in July and I believe they launched in Malaysia in October.

So were you very clear when you joined that this was your purpose to bring StashAway out of Singapore for the first time to a new country? What were you supposed to do?

Wai Ken Wong: Yeah. So with a great startup, like StashAway where you had heavy hitters in every single department, so heavy hitters in digital marketing and product and design.

So product design is what you see in the app and what you see in the website. That's the product. Good people in investments, our CIO and good compliance people. All I had to do, and they made it very clear to me in the beginning is to make as much noise as possible.

So that meant getting the word out, working with advertisers, working with partners, meeting with high net worth individuals, doing a lot of PR and recruiting people to help us grow the practice would also be a big part of that.

And also keeping the regulators happy with how we were complying with, the framework. That whole broad mandate was upon me. And it was not difficult to execute because when you have I guess, all aces, it's very difficult to lose.

. So I try to contribute as best I could try and recruit good people for them to see the same vision, try and get them excited. Met with the regulators, made sure that final hurdle towards that licensing was, was all well and good and made sure we were well set up for our launch. So when we did launch, , we had a press event and promote about us and I was radio and short after that TV and papers and all that.

I kept remembering just, okay. They said to me make a lot of noise, make a lot of noise. So that's what I'm good at doing now is just making a lot of noise, . Because there were a lot of things that were being done before the launch, like actually making sure the product was ready for Malaysia, but Singapore, Malaysia, not that much difference in terms of the wording and the tone.

Unlike say, launching in Thailand and Hong Kong, which we have close to doing, there's only so much localization that can be done. So we did those, made sure we did them well, but when it came to launch, the most important thing to do at that time was make noise. So I make noise we did.

Ling Yah: Were there particular things that you found were very effective because you have 5,000 people?

That's amazing.

Wai Ken Wong: Yeah. So again, some of it luck.

So I remember that when we launched that while digital was also going on the tech conference and my sister-in-law was working with Catcha at the time, and she said that hey, does Michele want to speak, give him a slot to speak about FinTech because he was at Dallara and Laura, he will be a speaker at well Digital.

So he came to speak first-time on behalf of StashAway and after his talk my sister-in-law introduced me to the Edge and it wasn't just the edge. It was the, personal wealth section. And this reporter called Nat Tan. She has been following us till today. She writes about us and she's been a supporter till today.

So we met her in that, conference. And when she wrote about us, She was even nice enough to include our website, to say, if you want to join the wait list, go to this website. And for a small business that's struggling to find a right to survive, a small thing l ike that would change things.

So great digital marketing on top of decent PR before the launch helped us build a really good waiting list. And a lot of it was actually organic as well because Malaysia, very close to Singapore, Malaysians living in Singapore, Malaysians who invested in Singapore would go on LowYat and like, oh, this StashAway, blah, blah, blah.

So like, it can be good and bad. So in this case it was good. And ultimately we had 5,000 people and then when we launched it that had a lot of kinetic energy from day one. And then on top of making a lot of noise and having a lot of fun. I guess those were the heady days.

In my first year, you just went on so many road shows and things like that, there was one fateful week where I had 15 speaking engagements in the span 14 days.

. So in two weeks I will be speaking at least twice a day and this was before Zoom, so it's not that I can just buy and then go into, it would be like, okay, go to this conference and then go to that conference. And then go to this company and do, something for internal and this, that, and the other.

You would feel a little bit rockstar because he would go to this conference and say like, sorry, I can't stay for Q&A. Cause I have to go to another conference. But those early days were very, very busy, very, very fun. the way we would relax would be to meet a lot of our friends and tell them .

So I would show them the app. I would tell them why I joined. I would tell them to put money. Some of them did, some of them did not. I have names of people who did not invest back then. but it's amazing. And even at a point in time, your friends will help you and you really get to see, like we your so-called friends are and the ones who really help you.

I would never helped me. I would never forget. There was even once that we were. We will, we set up our bank account and we just needed people to, test out, but our bank account was okay. So I was literally asking people like, can you transfer me a few thousand so I can give it back to you? just so things would be fine, ?

Plus we transfer money as well, but you need a relatively large amount of people just so you can read the code from different banks and things like that. Small, small things like that, but crucial, crucial, crucial. That's all.

I was telling my friend, yeah, can you transfer? And then some, no questions asked and like, Oh, this and this.

I'm like, where's it going? And we're like, get it back. This is not the investment part yet. That will come later. Don't worry. This is just me testing out my banking operations. So yeah, that was how we set up. And collectively as a group, Singapore, Malaysian, now we manage more than a 1 billion us dollars.

So that's no mean feat in around three and a half years, which I'm very proud of for the group. I'm very proud of for the people who did it from day one, we contribute of costs, a small amount. Whenever you take Malaysian ringgit and you divide by three and you divide by four, the contribution seems a little bit smaller than, how I think about it.

But , it's okay. I think uh, recognize our contribution.

Ling Yah: I imagine with all the fun, there were also challenges. When you just launched Q4 2018 market went down 20%. So how did

Wai Ken Wong: Because I'm actually in Singapore, they had a bigger pot to manage, ? So they had their own challenges talking to investors there, but because we were new, we only had one, two, maybe three months worth of people.

The amount of people to manage was not bad and not a lot. And the people who joined at that time in the low, low, low markets could be laughing because they would make so much money. Little, did they know that 2020 will be a crazy year, but , in every correction and every bear market, there'll be people that make money from it.

So that's why I keep telling people that, the time and the, where we are in the market cycle, doesn't matter as long as you have a long-term horizon. So the challenges were more getting product market traction, and a big way of getting product market traction, especially when it comes to money is to earn people's trust.

And so I was very, very aggressive on that earning trust side because we were new and our brand did not hold a lot of weight back then. We just had to be very consistent and we had to make a lot of noise in the way, sort of people would trust us.

Obviously, trust is something that you can borrow, you can never steal. You can only borrow and you can give it back. You can give it back.

So I remember in early days that we went on BFM and DFM is like, big media outlet and they lend you trust.

We went on and we did our show. And borrowed some, trust and we thought actually, Hey, BFM is like a really good channel, ?

So let's do some advertising here as well, ? Like no brainer. . But these four, these professionals Klang Valley let's do it. So it was nice to be able to say to them like, Hey, we would like to be an advertiser as well.

And then from then, first time actually recording a radio ad, we've now done it four times to see ads being created, to see bill bots being created on that.

We repped LRT stations to look for places where you would want to appear from a PR perspective. It was actually really cool. So running a business is not just about the dollars and cents. A lot of it is about where do you want to be in front of your customers.

So that's very marketing one-on-one and it was very cool for me to experience firsthand because it was very tactile. It was very real. It was like, if I gave you a hundred thousand 200,000, where would you go in advertise?

So you're of course, you are the most Malaysian person room. You need to go in, you need to know something. . So that was really, really fun

Ling Yah: Was content creation, part of the major arm, of building trust? Because that's something that you guys do really well.

There's an Academy. I think there's like three pillars of content. There's like personal finance, there's StashAway. And there's also like investment as well. So was that something that was very clearly a part of your strategy from the start?

Wai Ken Wong: Yeah. So this all comes down to our head of content at the time and now Head of Growth Marketing Rachel.

So Rachel is this really special talent who has a very good mix of business knowledge business background, but also things other than, business. So she was not like an industry veteran where she only had a certain way of doing things. she would always communicate in a very authentic, genuine, straightforward way, because that's how she wants StashAway to communicate with her as a user.

So she used that skill and branding and writing content is a skill. It's not easy to actually produce a lot of stuff in house. And a lot of the tone that we use is educational and it is non reactionary, . Because we don't want to be telling people to change their view of the world every time, , Jerome Powell coughs, .

Or the, or Trump tweets. Yeah. That's a good one. So very early on, they set the tone of voice to be very authentic, to speak directly to a customer because their money is in our hands in a way where we would have them focused on the long-term and create good habits because people didn't necessarily have good habits from the start.

So we needed to inculcate these habits. So through market cycles, through ups and downs, through different changes in portfolio, , the tone would be the same. You'll be assuring, you'll be longterm. You'll be to create good habits. So when I came on board, it was only to work with her to say, what would Malaysian's attitude be towards content like this?

And what other media would also be surrounding them so that our content can be relevant. . So writing about our retirement and talking about ETF rates And PRS and how that is really not enough to just rely on those two things to have a good retirement. You also need to invest on the site.

On top of that was a big part of being who we are at StashAway. Having good content creation in-house and also relating that to what's happening in the real world because markets are very, very fragile and yeah, I had a class session with her as well, and then she brought up a lot of doors points and I'm very glad she's on our side.

So like I said, we have very good people in, all positions. So I'm just very glad to be working with amazing people like that, who I can learn from and who seek my input . When it comes to Malaysia. So it's a great culture actually throughout.

Ling Yah: And I think for anyone who's learning about StashAway for the first time, some of the buzzwords that pop up immediately is the word robot advisory, as you said, firstly, and I think a lot of people are possibly even at this point, still not sure what that means.

So how would you define it and apply it to StashAway ?

Wai Ken Wong: Yeah. Yeah. So robo-advisor is a term, but We like to call ourselves digital wealth manager and how you can view it is as simple as having a digital fund managers. So instead of going to invest your money with a unit trust agent who usually charge us very, very high fees all you have to do is download an app and then it will take you 15 minutes to sign up.

You can deposit your money, you can monitor your investments. You can know what you're investing in, and then you can withdraw all from using the same app. You don't have to fill out any forms or meet someone, go to a branch and do all those inconvenient things. So that's the experience.

But what is StashAway's main value proposition besides being convenient and all that I think especially is a very easy way to get started to invest because to invest, you really have three options.

You either manage it yourself. You can give it to someone else, or you combine the two, some things you manage yourself, some things you give someone else someone like an expert, like a traditional fund manager or someone like statuary. So if you have never invested, it's very, very daunting. So I think learning about investing through investing on a platform like StashAway is a really good way to begin.

Firstly, because we invest your money outside of Malaysia, which is a huge plus. A lot of options out there. Focus just on investing in Malaysia and through EPF. And three other funds probably already have exposure. So investing outside of Malaysia is a way to learn about different markets. The second thing is that it really fits the part of your portfolio that sets you up for, for long-term, because there are different platforms and different ways of investing that you can do to make money in the short term.

Things like buying stocks, cryptocurrencies, things like that, which you might dabble into as well, but StashAway really fits that long-term and foreign exposure that a lot of Malaysians just don't have access to. So the great thing is that coming back to our original question, like, if you haven't heard about StashAway or what is it, what's the use?

So what's the utility. The advantage of using statuary is that experienced investors come to us as well. Knowing how they want to use specialists. So once they understand what we do, it's like, Oh, okay. You take ETFs and your portfolios and these ETS of different asset classes. Okay. And it's not denominated in US dollars.

Okay. So then they look at their current investments. Maybe they have a lot of real estate holdings, or they have a lot of stocks that they manage themselves. Then they go, okay. I will use that as a way to compliment what I have now. So it's not only for new investors. It's actually a lot of our clients are also experienced and savvy investors and some of them are also in that high net worth category where they clearly know what they're doing with their money and they clearly have enough wealth.

It's just that they have a particular use for statute. So that's all very interesting. I don't feel like StashAway is out of place. If you talk to whoever you talk to, it can suit whatever needs you have. So I think all in all, just to sum it up, it's just a very convenient platform to invest your money.

There's a lot worse things in the world than that.

Ling Yah: And the things that you invest through StashAway would be these things called ETFs, which are actually passive. So I wonder robot advisory sounds more active and you're thinking about where to invest it in. Whereas there's ETS, which you don't actually do anything about how do they work together?

Wai Ken Wong: So the term robo-advisor came from the U S because that's where the first robo-advisors were founded and the word robot advice comes from. The relationship that people would have with their financial advisor. So the financial advisor would tell you, or guide you what to invest in and what the early robo-advisors did was make you feel in some information.

And then they would then some sort of logic that would guide you into what portfolios to use. Hence the word robo advisor. It is not digital wealth manager or robo-advisor is not an active fund manager where they trade high-frequency investments on the stock exchange or really, really create a lot of trading activity.

It is actually more about just that advice. We don't really trade too actively. We actually combine ETFs along with our investment framework and ETFs are like you said, predominantly passive, but we can put together ETF portfolios, which are passive for the most part, but do better by changing the asset allocation from time to time.

And when we actually change it is when we look at where we are in the economic cycle. And we feel that in what we interpret the data as showing us is that we are in, and now in a different part of the economic cycle, US allocation should change along with it. So that's what we have adapted those technologies and complimented with technologies that we ourselves have built the investment framework.

And by that I think we serve our investors better actually, because imagine if you just held a static portfolio of ETFs, when the markets do well, you do well. And when markers don't do well, you don't do well. So the idea of having a digital wealth manager help you to do using an investment framework is to manage those severe ups and downs better.

And that's what we've been able to do over the past three and a half years, and especially over the last year as well. There's actually not a lot you need to do.

But when it's the right time to do something, we change your asset allocation for you and protect your portfolio or enhance your portfolio depending on where we are in the accounting cycle.

Ling Yah: And I believe that the investment framework you referred to as the economic regime base asset allocation or era and it's proprietary. So how did that come about? Because I believe you also rely on that in the Q4 2018 when there was a market correction. So you must have, had it up to speed performing what you want to it.

Even at the very start.

Wai Ken Wong: Yeah. We actually launched with era enable from day one and era. Or as you mentioned, economic regime based asset allocation is really the brainchild of our CIO Freddy Lim. He's had over 20 years of investing experience for major institutions. And the thing that made him want to do this was the 2008 financial crisis where he lost money in his, professional investing.

But he lost less than his peers, or his competitors, but he was just still upset that he lost money. There should be a system that protects people from going through severe losses. So that's where I came about at Euro takes into account where we are in the economic cycle, risk management and also things like Forex movements to give you a portfolio that is best suited for where we are.

So for example, if we're in a recession, you want more bonds, you want more gold, you are more consumer staples and utilities and healthcare equities. And in good times, you want more cyclical. It's like in now with COVID, , being eradicated. We are in full on cyclical mode where oil and gas companies, finance, consumer discretionary companies are coming back to life, emerging markets tech, doing very well.

so that's what you want out of your portfolio. And that's what you're as designed to do. it is a systemized way of investing. So actually Freddy doesn't have to rely on his mood swings or a sudden light bulb moment. He actually has programmed his thinking into a model.

So whatever data it takes skin, it can actually tell you whether you should feel invested or not. So that's the real value add. And no robo-advisor in the world has something like this or articulated articulated as well as we do because the asset allocation for a lot of robo-advisors are fixed.

They're static. And some of them have dispositive logic where they say like, from time to time, we will change things. If we shake the tea cup and the tea leaves fall a certain way and I blow the dandelion, we will change it. So when I read this stuff, they're white people. It doesn't really make that much sense.

So I still don't understand sometimes how they choose to change that allocation, but at least we have something in house and we articulated to the point where it gives you value as a user. we have very clever and we have looked into the sea of data and we have determined for you, each optimization is done in a way where. We tell you the motivation, why we are doing it. And we tell you what we're selling and we tell you what we are going into. So I think that's very valuable. that's not something that a lot of FinTech companies and our robo-advisors have.

Ling Yah: So in terms of investment decisions, this is not what users need to be concerned about. When they log into the app, they just need to input that data and really just decide on their risk allocation.

And you have a risk index of 6.5% to 36%. So how did StashAway come up with this index?

Wai Ken Wong: Hmm. So basically it is low to high.

So the way you interpret this risk index is to say there's a 1% chance of losing more than this amount in percentage terms. So 1% chance of losing one and 6.5 or 36% chance of losing more than that.

So we have 12 portfolios between 6.5 to 36, and a reason why it is not higher than 36 or it's not lower than 6.5 is that if you go lower than 6.5, you really are not taking a lot of risk. And there's no point for a fund manager to charge any fees to just give you like, Oh, give you 1%. Or if you like, , 2% or something like that. So that's why it's at around that level of 6.5%. And then as you add on risk, there are marginal decreasing returns.

So at a certain point, adding on more risk does not give you positive data. And that's why we stop. And note that this 36% and the 6.5% is the potential downside.

So we also want to protect that from being too high. You don't want something that's like, Oh, this could go down 50% and like, say it with a straight face and be okay with it now.

You don't ever want that portfolio to be yours. So we stop at a certain risk reward ratio and we offer , quite a lot in between as well. There's 12 portfolios to choose from. So all people really need to ask themselves a few basic questions. Like how long do I need to invest for, what am I investing for?

They also can ask themselves what receptor type am I comfortable with. And with that they can choose a portfolio for themselves, or they can just use our goal based investing feature for us to actually recommend and guide you to actually picking up portfolio. So it's, all very intuitive.

It's all very simple. And I just encourage people to use the app because you don't get charged fees until you deposit money. So you can just fiddle with it. Read sound articles, play with the goal-based investing feature and see if it's for you. . And if you really done all your research, then you can just put it in however much you need.

Ling Yah: So I'm intrigued by something you said earlier, which is the 1% chance of your portfolio dropping. How do you know that it would just be 1% because I mean that you get stock markets falling like in 2008, 50%. In the tech bubble, again, 20%. So how can you guarantee almost that 1%?

Wai Ken Wong: So I think I need to clarify.

So it's a 1% chance of losing more than the stated amount. so what we do with this metric of value at risk is to look at the amount of times that portfolio could fall that particular amount. if it does not very often for more than 36% then in the distribution of possibilities is a very slim event of actually happening.

So it's a 1% chance of losing more than that amount. So it's not to say that markets can go down 1%, 5%, 10% of the day is to say that it's very unlikely that your portfolio will fall. Modern 36%, more than six, 6.5%. So that is how it's set up because it's a probability model. And if you look back in time only big occurrences, like Oh eight or 2020, that really caused big swings in a portfolio like this.

When we look at that, we are assured that these portfolios are set up for tough times. And even in the tough times, they survive and then they recover, which is exactly what he did last year. so that's how it's labeled, which is a different way, right?

So why talk about risk? Why do you want to talk about the percentage of you potentially losing this amount of money?

. It's confusing. And you're talking about risk and downside. We believe that if you don't talk about risks, then you won't be able to make the investment decision. So that's why we've labeled all our portfolios. According to this risk index from 6.5 all the way to 36. And it's something that people have to honestly ask themselves.

Am I okay losing 36% potentially. . Even if it's a 1% chance of losing it, you have to ask yourself in a financial crisis. I could lose 36%. Am I okay with that? If not, that's fine. Going, you can much easily stomach something like 15%. Okay. So then you use portfolio in-between. Something more balanced.

A lot of people say, I want to make the most amount of money humanly possible yesterday, but like, that's just not how investing works. . So we have to be responsible about marketing and we obviously cannot and don't want to market returns, . Because it's all theoretical. And why tell you about yesterday's with us?

because that's not that relevant to you. So what is constant is risk? So we tell you about risk.

Ling Yah: So during my research, one of the criticisms or questions that I've found people had was just in the way that StashAway categorizes risk. So they talk about how the highest is 36% and the most is 39% to us equity.

And it seems to suggest as though greater exposure to U S equity equals high-risk. So lower exposure means lower risk because if you look at the lowest risk allocation, like exposure to the U S markets only in government and corporate bonds, you don't have us equity. So how would you explain to them?

Wai Ken Wong: I would explain that risk is constant and it doesn't matter where you actually get exposed to this risk.

Yes. If you want to introduce risk to the portfolio, we do look at the U S because that market and those particular sectors, that we've chosen are more volatile, so they have to have better potential gains and also potential losses. And another reason why the us is such a small portion in the highest risk portfolio is because we see risks to the U S dollar.

So because of that, we purposely reduced this exposure to U S dollar to the us to use equities across the board. And that's why we have to find risks elsewhere, which is why in the higher risk portfolios. There's also this other ETF label KWEB, which is the Chinese ETF, Chinese ETFs, especially the ones which are exposed to tech, plenty risky as well.

It's just that, , I think the way people look at portfolios can be a bit superficial because they work on what they know. And what they know is that, okay, the U S market is the most watched benchmark in the world. So maybe if there's less risk there or more risk that it informs us something about a portfolio, but truthfully at the end of the day, it's all just fun risk and whatever is in that portfolio plays plays a role either from a risk standpoint or diversification standpoint, or to give you exposure to a particular sector or to even protect the portfolio.

One criticism we do get is that why in my most risky portfolio, there's gold, there's a protective asset. So the reason for that is that. , like I said before, the U S dollar is something that we foresee depreciating, because we are printing the U S is printing a lot of U S dollars relative to other currencies could depreciate.

And what is a counter to that as another so-called neutral currency, it's gold. And from a risk reward standpoint, if let's say I invested all your money into the S and P 500, and I give you 10%, okay, let's just say, I give you 10%. And then I invest your money into a special way. And I also give you 10% from a risk reward standpoint, especially is better because it achieved the same amount of returns at much less risk.

Because they had that golden it different diversification in it. So ultimately the quality of your returns is judged based on risk. And you can just say, I could have made more money doing something else because that's first of all, the 20, 20 hindsight. And secondly, that is not commensurate with the amount of risk that has been taken, if you theoretically invested your money elsewhere.

So what we're after at the end of the day is risk reward. We're not just after Oh, potential rewards that if we go all in, we put it all on black. We put it all on rate and we get the return. If you get a return, you look like a hero. If you don't get a return, StashAway Is a terrible investment platform because it gives you potential gains.

but that potential losses, sorry. So that's why we are very, very careful with our investments. And that's why the composition on assets is the way it is, but it's fine. , it's conversations like this. It is questions like that, criticism like that, that really make people realize that investing is actually more complex than they might think.

It's not just about why invest in this particular ETF, you looked amazing. If you did that and you want to get rich yesterday, you would have just invested in Bitcoin in 2018 Tesla in 2019 rubber gloves in 2020 Bitcoin. Again, all the things that you would have jumped into the very hot stuff at the time and would have no idea why you're not making money.

. So investing is not gambling. . And that's why we have managed to risk as such. And that's why we have portfolios like that with assets like that. I think we're doing a pretty decent job since inception. Our returns range from three and a half percent to 17% per annum. So imagine being invested in the most risky portfolio and getting 17% for multiple years, and that's what long-term investing looks like.

You invest for many years, . And you get to realize good returns. So in different years, different portfolios will have different performances. By the end of the day, we'll give you a consistently good ones.

We have shown that we can, and we have weathered many storms. So we feel like we are the investment strategy to investment philosophies is definitely on the right track.

Ling Yah: Because you've already said, the kind of people you have on the platform range from quote unquote, unsophisticated investors, to those who really know how to invest. And one of the things people would say is, can I determine where all my investment is going?

And you have said, no. Do you think that's likely to change?

Wai Ken Wong: I think investing can be risky. So I think for people who are very, very sophisticated with their money, they have much more skill and options on their hand. And what we are designing for here is that balance.

Will StashA way work for you in your investment portfolio or not? If it doesn't, that's fine because there are people who choose to trade themselves. I have friends who trade options trading Bitcoin, and they do a very good job, but they're glued to the screen and they're trading their own money. So they live and die by their own decisions.

And they have told me from time to time, it's just like this may be something that I can do in terms of making my own money, but it may not be something I want to do because I need to spend a lot of time on the, screen doing my thing. So as long as it's a set and forget kind of things, that way it works for me, in their words. And this comes from sophisticated investors.

So for them to choose what they want to do, they can use other platforms. They can use other platforms to choose what they want to invest. But where we come in, is that we already have portfolios for you to use to make a certain amount of money taking a certain amount of risk. And we have StashAway Simple, lets you manage your spare cash or your safety net or your idle cash.

So we feel like we have done a decent job putting up portfolios on a platform that works for most people. If you one choice, if you truly want choice, then you have to. Live and die by your choices.

But the thing is, if your StashAway is the intermediary and you chose using StashAway and you lose money, then you're like, Oh, I should have known better.

So on and so forth.

If you want to make your own choice, you can do it outside of StashAway. you can use a broker to express your own investment philosophy, but do you want to trade whether you want to buy different ETFs, whether you want to get exposure to different markets. So let us do a good job for you.

And if you think you can do a better job by all means, try investing on your own and see where StashAway fits your investing philosophy. Because you might still need it to compliment your style. Maybe your style is, I'm very short term. I do a lot of trading. So part of my investment portfolio, I want exposed to long-term investing and in a multi-asset portfolio like statuary, there's all kinds of degrees of how you can utilize StashAway, right? ? It is a tool at the end of the day, and there's no one silver bullet that will free you from poverty. It's financial freedom and, , achieve through one platform in your life. You probably need three, four or five financial platforms , to reach all your needs.

So. Pick and choose where you use StashAway and ultimately you'll be fine.

Ling Yah: So last year, StashAway produced a new offering, which is a StashAway Simple. Could you share a bit about what that is?

Wai Ken Wong: Yeah. So when we launched, we were offering those ETF portfolio so people could invest globally, but then we also felt like something more fundamental is for us to manage people's cash and buy cash.

I mean, the pile of money that they have, that they don't want to put at risk. Not the same way as you wanted to invest. so we used a tried and tested financial product called the money market fund, and we branded it as StashAway simple, because we wanted you to invest your spare cash in a very, very basic and quote unquote, simple way.

We didn't want you to go to a bank and say, hi, I want a high use savings account. Only for them to say, Oh, you have to put in a minimum fresh funds of 30,000 and you have to make six transactions using this account. Every month you have to then buy this insurance plan. you have to then take out this credit card is basically a way for banks to cross sell your product, ?

And so many products and products that you might not need. And so many tons of conditions. So we didn't want that. So we wanted a way for people to get. FD like rates, but without the lockups. So that's where such recent broke comes in. Money. Market funds are not new. They are a massive asset class in Malaysia.

They are around 20% of assets under management in the unitrust industry in Malaysia. It's just that normally it's, marketed to corporates for corporates to manage the spare cash on their balance sheet. It's not really marketed to individuals, but individuals can buy any time. It's just that there's a real difference between you being marketed at something and choosing it versus following what the banks want you to do.

So we took something as plain vanilla as a money market fund, and we are popularizing it. So we still get questions like, how is this so good. I can get returns but it's not locked up. Is it PIDM insured? What is a money market fund? So we get a lot of basic questions from this, and we're just glad we can put people onto a good thing, because it's something that's so fundamental and it's just better than FDS because why lock your money up and risk?

Not getting any return if you break it early, ? Yeah.

Ling Yah: I mean, like you mentioned the PI DM perfection, which StashAway Simple doesn't have, and it does seem to suggest that there's greater risks than putting it into FD. So is there a reason why StashAway doesn't have it?

Wai Ken Wong: There's a reason because no investments are PIDM insured.

So even things like ASP are not PID and insured. It's just that people make the connection because they know that their FDS are PID and insured. So then they ask, is StashAway Simple PIDM insured?

And if you look at the reason for P IDM, it's really to protect the financial system, the by-product is that it's protecting you because if there was no insurance and there was a crisis, we would all run to the bank and there would be no more money in the bank.

And that would be a lack of liquidity. And the banking system would have a lot of credibility. So that's what the PRM insurance is that do it's meant to serve two masters, the financial system. And you.

But when does it really often serve you? Like how, since the Asian financial crisis, there has not been any bank failures in Malaysia.

So why protect yourself against a storm that will not come? , and the money market fund that's investing your money is not investing there. It's not putting the money in, small banks. It's actually putting your money very, very large established banks.

So if you want to argue both ways, I could say that you put in all your money into an FDN one bank. You are positing could go down. I would say that me investing for you and putting it in different banks. And if one of them goes down, this many that remain you'll be safer spreading your bets around. So both are academic points because a run on the bank would not have been an Asian financial crisis will not happen. So really PRM insurances and you showing us that you are very likely to not use.

What you should be asking yourself is what is the underlying investment of a money market fund.

? So a money market fund is invested in FDs. So that's the fun of FDs. So why so worry? It's just that naturally people feel what is new to them. And if you just dig a little deeper, that's actually nothing dodgy inside. It's just a fund of FDs. It could not be more boring than that.

If you talk to any CFO in Malaysia, small and large companies, they're just like, yeah, we know what this is. It's just that agents have not spent a lot of time educating the market about this.

Ling Yah: So in the event that StashAway say goes bankrupt, then what are the guarantees for your customers?

Wai Ken Wong: So that's a valid question.

So any financial institution could, go down. And what risk do you take putting your money with a financial institution? So the first thing is that we are licensed by the securities commission. So We are monitored. We are regulated. We operate a very high operational and compliance level. undergo many types of audits, many times a year.

if there was any signs of impropriety, the regulator would catch it. And if let's say that aside, there was a business risk that we go under. For whatever reason, we stopped being able to raise funds and we run out of internal generated cashflow and we can't sustain ourselves. We would wind up and we will return your investments to you at the market value.

So you don't have to stand in line like credit though, because that's not how we are set up. We are set up using a system of trustees. So we have our balance sheet, which is separate to your investments are actually on the trustees care and so-called custody. So if we fail as a business, we would then liquidate all your money at that market at a market rate, one more than 1 billion, ?

So we wouldn't even in a few days to sell that, bring that back to Malaysia and an attribute back to you. It's not like being an investor in a bond and a corporate, the company cannot pay you. And therefore you need to take a haircut, take 70% or 60% of the principle that you put down.

So you're not taking quote unquote counterparty risk. And we also go so far as to only buy ETFs that do not use derivatives. We only have ETFs that actually hold the underlying asset. So if even the issuer of the ETFs, which is also unlikely to happen, goes down, you actually have to have ownership of those underlying assets.

So those big ETF issuers, like black rock and state street and all that, if they go down, well, you would still not take counterparty risk. So you are protected and many, many, many layers.

So let me just give you a TLDR. So firstly, we are regulated. Secondly, your money is held by trustees.

And so you get that your investment. if their company goes down and to leave and the ETFs have ownership of the underlying shares and bonds and gold, so you don't have to worry about ETF, the ETF issuers going down as well. So is it a possibility? Yes. Is it a high possibility now?

We also just raised money last year in August.

Because we survive tough times. We resolved because survived COVID. The investors saw that we were resilient and actually it was a relatively easy fundraise because we were growing. We're doing very well. And we needed money to expand to new countries rather than just protect our position.

So from a company's perspective, from an investment perspective it's all very safe

Ling Yah: Before jumping into the investment, one final point.

When people look at StashAway simple, the thing that always jumps out is projected rate of 2.4%. So how do you get that number and what kind of rate is StashAway taking itself?

Wai Ken Wong: Hmm. So the rate that we get per statuary symbol comes from the fund manager. So we asked the fund manager one year from now, what is the rate likely to be? Then they give us a rate. And then because we are working with the fund manager as a corporate customer, representing many, many, many retail customers.

They also give us a rebate. It's the same as buying in bulk. Like if you want to buy you'll get a discount. So they give us a rebate, which we completely passed on to customers to round it up to 2.4 as well. so that's why we can represent that rate is because every month we talked to the fund managers of this money market fund and they give us a projection of where the market's going to be in tough ones.

And the reason why they can give us a good forecast is again, because it is a of MDs, so they can see how it's layered. They can see what's the weighted average maturity and the weighted average rate. So it can give us a very good projection. If you asked me to give you a projection on the 36% risk, that's impossible, ?

Cause I don't know what individual ETS will be doing, but for special is simple. We wanted to represent a rate that is forward looking so people can make an informed decision about where best to, for their money. Because at the end of the day, it is still an investment, but it's an investment into many, many FTEs.

So, , we feel pretty good about the rate and in Singapore, the rate has had to change because the Singapore monetary policy is not the same as Malaysia, when they drop rates, the rates may drop as well. So with Malaysia, so far, the rates have not dropped and we were not forced to drop it yet.

So in Singapore, we've had, we've dropped the rate twice and we're still doing just fine because the FDS they're also at, rates that are a little bit lower than what we are giving up on StashAway simple there. So ultimately we feel that for your spare cash, it's a pretty good place to be because there's very little risk to it at all.

. And the return that we, project is also net of fees already. So don't worry about us chipping away at the fees and all that. What you see is what you get.

Ling Yah: People always compare session by with Wahed and MyTheo.

So how would you distinguish StashAway from these other guys?

Wai Ken Wong: As an investor, as a buyer, you can judge different platforms by comparing themselves to each other. And fees is just the first part, but then you have other things like doing investments returns and service level.

So I think we are different because fundamentally we have ERAA. And that differentiates us from others because they offer static portfolios that don't change. And for us, we think we can do it better. And actually we have benchmarked to performance and the returns and we are a hit by a very white match.

So we outperform their investments by, a long margin.

So other nonfinancial non investment motivations could be things like, how is the app designed, do they have good content? Do they put out good articles, good educational tools. we do that through Academy inside the app.

I would also argue, but this is subjective that I'll have is more seamless and more intuitive, but that's again, that's subjective. Another thing I would say is that compared to Wahed, our investments are more global because we're head is mostly local. So I actually think that the global allocation is important.

And then when we look at MyTheo, when we look at the ETF selection, when we put like two light next to each other, say, I'll take your emerging markets and put an X by it. Yeah. Which also is messing into my new markets.

Our ETF selection is just better. If you just do the homework and you drill down into their university our universe, we pick better ETFs, not just from a performance standpoint, but from a fees standpoint, from the track record, the consistent returns.

So I have every confidence that I'm riding the right horse, but I guess it's really up to you.

Ling Yah: One of the things I noticed people always ask you is, are you in crypto? And you have said, no, because they haven't found anything in ETFs that are good for crypto.

Do you think that is likely to change because there is a new Bitcoin ETF that was just found the U S by a Scaramucci. So it seems as though more and more of these ETFs are popping up.

Wai Ken Wong: Yeah. So I think cryptos is a very interesting space and it is something that we do believe from a diversification standpoint. People should have explosions, but I do think that for us to actually get exposure to it should be a more meaningful percentage of our portfolio. And now, even if we were to include it only be like something like 1% of our portfolio.

So it's not, that meaningful and the ETFs while they were just launched. It doesn't mean that they will last. ETS have come and gone and all sort of ETFs that track Bitcoin now are not doing a very good job because they are not tracking the price of ETFs. ETFs are not tracking the price of Bitcoin accurately.

For example, the Grayscale one offers it at a 30% discount to the actual spot price of ETFs. So my question to use this is if you own ETF, why don't you get it yourself and just manage it in a way where don't get too greedy, don't get too fearful, have a calm head.

And for us to actually include crypto ETS into our platform, a few things need to happen.

Firstly, the asset class needs to be more mature where we can actually back test it through different economic regimes so that it could also be used in conjunction with Europe. If you just include it from diversification point of view for fun, then that's no real value add for us. So we probably won't include it.

And then another thing is that the ETS should really track the price of whenever a client is trying to track the in your coin or Ethereum much better than it is now. And those ETFs need to have significant, more size, and the fees should be very low for us to actually go into it. So I wouldn't hold my breath, but it doesn't mean you should hold your breath.

You can actually go out there and get some coins for yourself, cryptos for yourself and see how it goes. ? Because I do think from a diversification point of view, it's interesting. At least 1% of your investment portfolio, 5% investment portfolio into crypto, if you have to stomach for it, is my advice.

Ling Yah: So we talked about raising funds earlier. I'd love to drill down a bit.

So series B 11.8 million raised in July, 2019, that by eight Rose venture, what was the purpose behind series B? Because now you have series C rate, which is 60 million, July 20, 20, so very fast.

Wai Ken Wong: Yeah. Yeah. So series B was actually done because we knew we wanted to expand internationally at that time.

We may not have known that we would have gone into three countries, but we also wanted to invest in Singapore where we have a very commanding position. And in Malaysia where we were, just getting started.

Actually with series C. It was just so it's just so happened that the timing of us growing very quickly invited a lot of attention from the VCs.

And we made the decision. Rather, the co-founding team made a decision that taking when you would actually help us accelerate our growth. So it was not that we used up all the money from series a and B. It was more about, we can actually achieve more with the funds that we raised. So instead of just exploring new markets, we would actually make commitments, get the license, get the people on the ground, set themselves up in a way that Malaysia was set up.

So that ultimately they could be engines of growth themselves. So that's what the money's for. I think there's also cycles, ? Like when it comes to the VC world, like certain times money would be very hard to get. Sometimes money will be easier to get. And I think the co-founding team felt that we're in a good place.

We are receiving a lot of attention that's necessary as well. So yeah, it's all very I want to say business as usual, but it's, more like, it's just very clear here that decision making, rather than like, Oh, we want to move into something crazy. We want to, , do something really, really different.

It's all just about gradual expansion and also getting depth in different countries.

Ling Yah: To what extent would your investors have a say over the way that StashAway runs? Because you have quite a few different VCs, like series C was led by Square Peg, which you said, different VC. So it seems like quite a lot of interests I play here.

Wai Ken Wong: Yeah. So square peg, which is Australia's largest VC also invested in us. And so with eight Rose, Fidelity's a VC. and also along with series T board up in spoil investments, which is a gentleman conglomerate VCR. So I think. They all rally around the goal of the co-founders, which is to grow a digital wealth advisory company at scale, and the numbers show that, and they've been tracking our progress for a long time.

And when these numbers keep getting better and better, they gain confidence ultimately as financial investors, as opposed to a strategic investor, their goal is to make money. Their goal is to let the co-founders do what they feel is best controlled by a very disciplined board of course, but to let the co-founders lead the charge.

And by doing that in a way that makes sense to them.

Basically the co-founders have been in the driver's seat, so to speak. So because of that the direction has always been very clear. We've never deviated from our goal of empowering people to build wealth for a long time. There's not been any side projects that didn't make sense or vocal board members or anything, nothing of the sort.

All they're also very mature VC, so they have been through many, many companies and if seen different things in different countries, they've gone through crisis, sort of some very mature board. They want to set us up for success, where it enables them to make a huge return, something like 10 X of their investments, otherwise wouldn't justify the investment.

So I think they're giving us a very good chance of doing that. And as someone who has worked here for about two and a half years, , the direction has always been the same. So I have faith that it will continue.

Ling Yah: It sounds as though, you know, given everything you're saying that you have a very positive outlook in terms of the global market. Would that be a fair assessment to make?

Wai Ken Wong: Definitely now in March of 2021 versus last year. I think investing, it's never easy, but you should not let timing be an issue because as long as you take the long view and as long as you dollar cost average, you'll be fine.

So a lot of our risk factors that were there last year are not here. And even if there are risk factors, there are less.

So what I mean by that is there's no trauma anymore for that global instability. There's no more COVID for that health led economic crisis. So the only thing that's putting markets at risk now is the speed at which we come out of the COVID lockdown and economies reopen, and also for the financial markets to readjust, to normal growth again, because US treasury has done a lot to prop up markets in bad times, and it's proven to be very effective.

So it needs at some point to actually be in control of the current situation.

So it gives the markets a very good chance of doing well and recovering.

Ling Yah: What do you think the rich know that the poor should know?

Wai Ken Wong: I think what the rich know, and therefore it's something that they see is that they have more options to invest their money and more money is being thrown at them and given to them, for them to use because they are such good customers in the eyes of the banks that they get faster accelerants to reaching wealth.

So for example, if you're a wealthy individual and you make a million a year, you pay a certain amount in context and you follow the same schedule as someone else.

You follow the same schedule as someone else. But in the thing that sets you apart is investing so rich people invest in a way where they actually get very little tax in terms of capital gains, because in Malaysia there's no capital gains. So people really need to think about getting into a mode where they can actually invest.

Whereas rich people actually get a lot of options to invest and actually see more trends to invest and actually get given more money to invest. And because of that, they race ahead and it's very hard to catch up, but it's not too late to start. It's just, how do you really get ahead?

Ling Yah: Well, thank you so much for your time. so these are the final questions I always ask all my interviewees. The first one is do you feel like you have found your why?

Wai Ken Wong: I hope so. My why seems to change. I think that is something that, is perfectly natural back then.

My, why was do it for passion? Whereas now I do things for enjoyment and to be, true to myself and to be in the moment. So I'm driven by that ability to be who I am and do what I'm good at in the company that I am at now. I think that fuels me and your, why can change. ? So back then, I wasn't married now.

I am. And if I have a family that will change in the future, the Y rotate as well. ? So , be flexible, be adaptable. And to me, my, why is I really get to be myself. I really get to exercise a skill that I enjoy and be in a relatively good position where I can affect change.

Ling Yah: What kind of legacy would you want to leave behind?

Wai Ken Wong: I honestly don't know, but what I do know is that since I've started working and getting involved in business, I've always wanted to be in a position of leadership. I think it's because whenever I look at my situation, there are more and more things that I want to affect and you can only affect them in positions of leadership.

I like to think that I get to be a part of businesses and platforms and opportunities. That mean something to people and myself. And when I am no longer there, then they will speak of me kindly. I think that's, all I really want. That day I was. Hosting some friends at our office, which we just moved in to.

And I said that it's very likely that StashAway will be in this location and in this office beyond me. . I will move on because even in life, everyone else moves on. . And then I was talking to my wife and I said like, even with Batman, this new Batman and the new Batman would not all man, but what he did with the role or whatever.

. So there will always be a new Batman. They will always be a new leader. And I just want to be spoken well off. . Like, Oh, okay. Josh Clooney, Batman was pretty good there. Christian bale was pretty good that's all I want. . Because by then I would have been gone and to do different things or not around, so it's fine.

. So as long as I leave behind a platform in a position and then a business in decent shape, that's all I want. That's my legacy.

Ling Yah: What do you think are the most important qualities of a successful person?

Wai Ken Wong: I think each person will have a different quality. I think my qualities are to have perseverance, to have resourcefulness and to be fun, to work with.

I think those those things are what keeps me going. And time and time again, I rely on these things to push through different challenges, different issues that come up, , problem solving. But at every time, if I ask myself, am I having fun? Am I liking what I do? That is really, really important to me.

So as long as you are, you can persevere. You can be resourceful and you can have fun. I don't think you need a lot else.

Ling Yah: And how can people follow you, find out what you're doing. Learn more about stash away, sign up.

Wai Ken Wong: so pick your poison. I, like to be on as many platforms as possible, so you can find me on LinkedIn.

I'm also on clubhouse, just type in my name one way can and you'll find me,

I also do StashAway academy events almost every week. So on Wednesdays, if you want to hear them talk about specifically money, you can follow me as well.

If you want to sign up to, stash away and get a promo for your listeners, you can go to stash away dot mind, four slash Y 10 that's w a I K E N. And then you can actually get Six months, no management fees.

Ling Yah: And that was the end of episode 42.

The show notes and transcript can be found at www.sothisismywhy.com/42 alongside a link to subscribe to this podcast, weekly newsletter, featuring all kinds of other inspiring and interesting things I've found over the course of this week.

And stay tuned for next Sunday because we'll be meeting one of the world's most well-known English baristas turned vicar on his faith journey from writing the essay, disputing the existence of God in school to heading one of the world's most well-known Anglican churches.

And evangelical course that seeks to explore the meaning of life.

Want to learn more?

See you next Sunday.