Income’s financial advisory arm wants to capture demand for alternative investments

[SINGAPORE] Amid growing demand for private market and alternative investment products in Singapore, financial advisers are increasing efforts to offer products in addition to the traditional insurance and investment products. Income Insurance’s independent financial advisory arm, Income Advisory Financial Advisers (Iafa), is one such example.

Studies show that the demand for alternative investments is projected to reach US$25.8 trillion by 2032, growing at a compound annual growth rate of 7.9 per cent from 2024 to 2032. This growth is expected to outpace the 7 per cent to 14 per cent increase seen in mainstream products, driven by global economic shifts and market disruptions.

With a network of 255 advisers, Iafa is transitioning to a partnership-based business model that expands the range of products available to clients. Beyond traditional insurance and investment options, advisers will be able to access private markets, alternative investments and structured products.

This strategic shift follows the appointment of Grace Yong as CEO in February. She told The Business Times that many products commonly available in the broader wealth space were not being made available to financial advisers or their clients.

“The shift in our business model stems from a need to better serve our customers with the increasing demand for value-driven advisory services, and differentiate ourselves in this competitive advisory landscape,” she added.

Yong assumed the role of chief executive in February, having previously held senior roles at Tiger Brokers Singapore and iFast Corporation overseeing growth, customer operations and strategic partnerships.

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As part of its new model, Iafa has started working with three key partners – digital wealth platform Arta Finance, brokerage firm Tiger Brokers, and ride-hailing company Ryde – in the past quarter.

These additions complement Iafa’s existing network of more than 80 partners, spanning life and general insurance, investment, asset management, and non-traditional sectors including Singlife, Manulife, HSBC, and Etiqa.

Looking ahead, Iafa is targeting 12 per cent growth in its number of partners by 2025, with a particular focus on strengthening its collaborations with Arta, Tiger Brokers, and Ryde.

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With these three new partners, Iafa has seen a 35 per cent increase in case count and a 75 per cent rise in total sales from February to March.

Yong noted that each partner brings unique strengths. For example, Arta Finance offers fractional access to private market investments, with Iafa being its first and anchor distribution partner.

Growing appeal

Yong pointed to research showing that the traditional 60/40 portfolio, once designed to balance risk and return, is no longer optimal in today’s market environment.

Instead, she believes a 40/30/30 allocation – comprising stocks, bonds, and alternatives – has outperformed traditional portfolios, especially during periods of high inflation, such as the current market conditions. With the 40/30/30 portfolio allocation approach, where up to 30 per cent of a client’s portfolio can be dedicated to alternative and private market products, Iafa aims to balance clients’ risk exposure.

Given the unique risks of private markets, the firm also uses a layered approach to align investments with each client’s risk profile. “We embed risk-profiling tools and conduct suitability checks within our advisory workflow, ensuring that clients are only introduced to products that align with their risk tolerance and investment horizon,” Yong said.

Since such products were traditionally unavailable to them, Iafa offers comprehensive training to those unfamiliar with private markets. This training is both in-house and developed in collaboration with Iafa’s partners, leveraging their expertise.

For more experienced advisers, particularly those with backgrounds in private banking or high-net-worth clients, Yong said that Iafa focuses on advanced training in portfolio allocation, and market positioning.

She added that Iafa’s advisers are certified through the CMFAS Examinations, which are the licensing requirements for capital markets and financial advisory services in Singapore. “We want to make sure that our advisers are always kept up to speed with what’s happening in the market, and we also try to provide ongoing updates through webinars and market outlooks.”