In this review, we take a look at Wealth99, which is a blockchain native Wealthtech company headquartered in Sydney, Australia.
Wealth99 is an online platform that makes alternative assets more accessible to everyday investors.
‘Alternative assets’ are those beyond traditional assets such as property, shares, and bonds. They include a new generation of assets such as crypto, tokenized assets, and digital assets.
On the Wealth99 platform, alternative asset options that are currently available include tokenized precious metals (gold, silver, platinum) and a small curated selection of high market cap cryptocurrencies, including Bitcoin, Ethereum and Cardano. However, Wealth99 expects that roster to increase in the near future.
Wealth99 offers small-scale investors the opportunity to invest in alternative assets as a way to add diversification to a traditional investment portfolio of shares and bonds.
Wealth99 operates mainly in Australia and the UK, although it has clients in EU nations as well. Currently, it has around 22,000 accounts.
Wealth99’s management team hope to make investing in alternative assets more accessible to more people. Their mission is reflected in their name. The 99 in Wealth99 refers to the 99% of investors - the everyday people - who are locked out of the best investment opportunities. Until now diversifying an investment portfolio with alternative asset types is mostly restricted to institutions, hedge funds and high-net-worth individuals. Tokenizing assets (as in creating digital versions of real-world assets) allows fractional ownership, which makes it more affordable for everyday people to buy and sell high-value items like precious metals.
- An experienced management team
Wealth99 is led by people with long-term experience in fintech and digital asset development and creation. In this regard, they differ from many other players in blockchain fintech, whose companies are often stacked with developers with little real-world business experience.
Key People: Ian Lowe is the Global CEO. Fernando Pacheco is Chief Product Officer and Ben McGann is the Chief Marketing Officer.
- Secured and insured assets
Wealth99 provides world-class insurance and third-party custody with Bitgo for most of the cryptocurrencies it offers. Its tokenized precious metals are fully backed by the actual physical metal, which is stored and insured by one of the world’s leading bullion houses.
- Wealth99 has its own asset exchange
A big advantage of Wealth99 is that it has its own secure asset exchange linked to its website. That means you can decide to buy a crypto or a precious metal, complete the transaction, and store your purchase, all without ever leaving the platform. The interface is clear and very easy to use, compared to most DIY digital trading platforms. It’s good to see that industry best practice is being followed for security too, with an A+ independent security rating, mandatory 2FA and triggered login follow-up emails.
- Limited choice
Right now there is a limited choice of alternative assets being offered by Wealth99. Clients are restricted to a choice of 15 top cryptocurrencies and tokenized gold, silver and platinum. While there is a lot of discussion about the tokenization of other assets, in particular commercial property, there are still certain regulatory requirements that must be met before they can be offered in tokenized form.
It’s important to note that while this limited choice may be seen as a con, it can also be seen as a pro. Wealth99 has put a great deal of thought into the selection of assets available on their site – restricting their offering to alternative assets that they genuinely believe to be the highest-performing, highest-potential, and highest-quality in the world. For example, Wealth99 doesn’t offer NFTs, as it doesn’t believe that they fulfil the criteria of investable assets. Wealth99 hopes that other alternative assets will be announced soon, but there is no firm date for that yet.
- Blockchain is still new
Clearly Wealth99 believes that blockchain-based financial products are the way of the future, and they are certainly not alone in that. But it’s still early days in this new technology, and that means there is still a very large proportion of the investment market that is yet to see its potential - and that includes financial markets regulators. However there is enormous pressure being placed on governments to bring blockchain and tokenized financial products into the mainstream. In particular, the governments of the UK, Australia, and the USA are increasingly becoming in favour of digital financial solutions.
- Aimed at Australian and UK investors
Although Wealth99 offers globally accessible products, the need for crypto licences, plus KYC and AML regulations means that currently, their products are only available to residents of Australia and the UK. While expansion to other markets is a possibility, Wealth99 hasn’t announced any concrete plans to expand the number of places they operate in.
Are alternative assets a good way to diversify your portfolio?
Alternative assets have been used by institutions, hedge funds, and the very wealthy for decades as a way to secure their investment portfolios from swings in the value of their traditional investments. The proportion of alternative assets held by these big investors tends to be around 10% of the total value of their portfolios. In contrast, smaller-scale investors have usually not diversified beyond the 60/40 split between shares and bonds. To small-scale investors, diversification means owning a range of shares – not owning assets from entirely different financial categories. However, this attitude is beginning to shift.
With the disappointing returns from the global share markets and meagre bond yields, alternative assets are becoming increasingly attractive. Now with the advent of asset tokenization and fractional ownership, alternative assets are within the reach of people with $1000 to invest, rather than $1,000,000.
Review summary - Wealth99.
For now, choices on Wealth99 are limited to tokenized precious metals and a shortlist of major cryptocurrencies, and customers are restricted to investors resident in the UK and Australia. If these limitations do not exclude you, Wealth99 could be worth considering for private investors who want to take control of their own portfolios and add diversity to their investments with alternative assets.
You can find out more about asset tokenization and alternative assets at the Wealth99 website - wealth99.com
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.