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Simplifying investment advisory in Indonesia: Startup Stories

Focusing on B2C and B2B2C segments, Moduit combines robo-advisory services and investment managers to better serve and educate investors.

Jeffry Lomanto, CEO of Moduit. Courtesy of Moduit.

Jeffry Lomanto started his career 16 years ago as a mutual fund salesman at a global investment bank in Jakarta. He remembered how difficult it was to educate prospective clients about different investment products. “Market literacy about investment was very low back then, so the consultation session could take hours per client, which is inefficient and costly. Apparently, this problem persists even after 16 years,” he told KrASIA in a recent interview.

Aware of this challenge, Lomanto established a fintech platform called Moduit in 2018, focusing on investment and wealth management services. The company aims to streamline the investment management process and support clients’ investment decisions via robo-advisory services and investment advisors.

“As time progresses, the market is starting to evolve. In the past, clients might believe whatever advisors say, but now they require high degrees of transparency, especially in terms of cost and risk associated with the products. They’re also more selective in choosing products. Therefore, we need to get to know them better to identify their needs to offer personalized solutions to achieve their financial goals,” Lomanto continued.

Moduit serves two market segments: business-to-consumer (B2C), targeting retail investors, and business-to-business-to-consumer (B2B2C), focusing on mutual fund sales representatives with high-end clients. For B2C customers, the platform utilizes robo-advisory services to determine the best investment strategies and advice, while for B2B2C clients, Moduit provides assistance in the form of sales representatives, called “Moduit advisors.”

In February, the startup launched an advisor app, which includes a client relationship management tool to help the firm’s advisors with pipeline management, income planning, scheduler, training programs, market updates, and other services.

Moduit offers around 60 mutual fund products in collaboration with big-name institutions like FWD Asset Management, BNI Asset Management, and Eastpring Investment Indonesia. It also provides mutual fund investment opportunities in US dollars as well as investment management agreements for clients managed by advisors.

Digital wealth management is still in its infancy in Indonesia, with only a few players in the market. Nonetheless, Lomanto believes its B2B2C offering is what makes Moduit stand out among competitors. Lomanto said there are currently dozens of advisors on the Moduit platform and he expects to recruit more in the future.

“Our B2B2C concept is pretty similar to the agency insurance business, where people can join an insurance company to sell its products. Similarly, anyone can sign up to sell mutual funds on our platform as long as they are licensed. Some of these advisors can later group and form an agency where they recruit new advisors to join the platform,” he explained. 

To join the Moduit platform, advisors must have a mutual funds representative or a broker-dealer representative license issued by the financial authority of Indonesia, OJK.

“Market literacy is still low today, so we make sure that our advisors are well trusted. We also have an online education center which consists of articles, market updates, and insights to educate people about the ins and outs of investment,” said Lomanto.

Screenshot of Moduit’s advisor app. Courtesy of Moduit.

The platform currently has 20,000 active users, with the B2B2C segment taking around 86% of the total managed funds. Its assets under administration grew around 40% per month before the COVID-19 pandemic, but that slowed down to a 13% growth rate from March to June, according to Lomanto.

“The good news is that we saw surging interest from financial advisors joining the platform to get additional income. They are generally happy with our service. Some of them even left their nine-to-five jobs to focus on our platform,” he added.

Moduit doesn’t charge any transaction fees from B2C users. The company monetizes its services by taking a commission from mutual fund providers. The platform applies a revenue-sharing system with advisors, while it gives them the freedom to set their consultation fees for clients within the appropriate range stated on the prospectus of each mutual fund product.

The startup is expected to raise about USD 3 million in a Series A funding round that was originally planned to close this year, but this has been delayed due to the pandemic, according to Lomanto.

Moduit is preparing to add more investment products to its platform, including bank deposits, insurance, bonds, and securities by the end of the year. “We want to offer the full spectrum of wealth management offerings. Our focus for the next two years is to continue learning and understanding our user behavior to add products according to their needs,” Lomanto concluded.

This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.