It has a rich history, too, apparently. During the British colonial era, it’s said to have been known for its opium-smoking and gambling dens.
Amoy Street is possibly not, though, where you might expect to find an advisory company offering state-of-the-art, fee-only wealth management and in-house discretionary asset management services to high-net-worth expatriate investors.
After all, some of the most expensive and desirable office towers in all of Asia are located no more than a few blocks to the north or east.
But Stephen Davies, who founded Javelin Wealth Management 10 years ago, and who bought 78 Amoy Street in 2006, says his clients appreciate the unhurried, historic charm of his grey-shuttered, green tile-roofed building. It is, he suggests, a Singapore version of the antique-filled offices of an adviser located in a listed former townhouse on a quiet street in Mayfair, London.
The Amoy Street offices are also a bricks-and-mortar example of practicing what you preach, he notes – to be precise, taking the decision to invest boldly in an opportunity that presented itself, even though it was, and remains, an investment that none of Javelin’s rivals have chosen to make.
“We bought in Amoy Street, along with a few other shophouses around the same time, because it made much more sense to have a stake in our own building than to keep paying rent every year to a landlord of some faceless, featureless glass box in the central business district,” he explains.
“Owning our offices was consistent with the good investment advice we give to our clients. We were putting our own money where our mouths were.
“For the same reason, we sold the properties last year, because they had gone up in value so enormously that, again, it didn’t make good investment sense not to. We’d bought it for $600 a square foot, and sold it for $2,000.
“So now we’re tenants again, this time of the people we sold it to. At this stage it works for us, and has also enabled us to free up capital that we can use to invest in our business over the next 18 months.
“If we need more space, which we will eventually, we can move more easily now that we’re not tied down as a property owner.”
Major expansion
While the exterior of 78 Amoy Street may appear to have changed little since the days of “modern Singapore founder” Sir Stamford Raffles – let alone since six months ago – meanwhile, the business inside it most definitely has.
Last year Javelin was given approval by the Monetary Authority of Singapore to upgrade from its Financial Advisers licence to a Capital Markets Services licence, enabling it to offer discretionary management and fund management services, in addition to investment advice. In December,it took over the management of the funds of a local asset manager, Binjai Hill Asset Management, with which it had been in talks for almost six months.
Justin Kendrick, the principal and founder of BHAM, has joined Javelin as its new chief investment officer.
Both the new Capital Markets licence and the acquisition are part of Davies’ overall strategy, which is aimed at differentiating Javelin from its local rivals by targeting clients with $500,000 or more to invest, and who are seeking, he says, “a high level of investment advice, combined with a discretionary portfolio management service for those clients that want it”.
“They come to us for objective and transparent advice, not only on their immediate investment objectives, but also on their longer-term planning issues, for themselves and their families.
We spend considerable time, even before any forms have been signed or fees paid, working with them to determine their objectives, to ensure we are able to provide them with the services and advice they are looking for.
“This helps to begin building the necessary trust that is central to a long-term relationship.”
Lack in market cited
If Davies seems to stress concepts like “trust” and “long-term relationships” when talking about his business, there is a reason: such elements were lacking in the financial advice he says he was given back in the 1990s, when he was working in Singapore’s financial services industry.
“I started working for Hoare Govett in Singapore as an equity investment analyst in 1987,” Davies, now 51 years old, says.
“I subsequently moved over to equity sales, and ending up running offices for the group in Singapore, Kuala Lumpur and eventually London.
During this time, Hoare Govett Asia – which had been owned by its employees – was acquired by ABN Amro.
“Being an experienced investment professional, I was disappointed by the quality of service and advice I received during those years from various financial intermediaries, whether banks or IFAs. The lack of transparency in terms of investment products, particularly with regard to fees and other charges, was something that clashed with my own training on the institutional equity side, where good service for a fair fee was part of the firm’s DNA.
“Following my participation in the successful management buy-out of Hoare Govett Asia, and its subsequent sale, I tried to find an adviser who would focus on the long-term relationship, and long-term returns, rather than on quick product sales with little or no commitment to a credible or committed after-sales service.
“After failing to find such an adviser, I ended up setting up my own business to do just that.”
Davies downplays the significance of the “Javelin” name, but concedes that it connotes an object that is “sharp, focused and to the point… just like our advice”.
Impact of FAIR
These are busy days for Davies and Kendrick, as they work to merge their business activities while at the same time preparing Javelin for the Financial Advisory Industry Review – a sweeping new regulatory regime that is to begin taking effect in Singapore next year.
The general idea of FAIR was to encourage advisory companies to be focused more on the advice they give than on simply generating sales.
Under FAIR, upfront commissions are to be capped, causing advisory firms to seek alternative methods of remuneration, such as trail payments.
A so-called balanced scorecard system is also to be introduced, whereby advisory firms are supposed to grade their advisers on a range of non-sales “key performance indicators”, such as their understanding of their clients’ needs, the suitability for their clients of the recommendations they make, and their overall ethical conduct.
In total, some 19 initiatives are being introduced, although the Monetary Authority of Singapore, which is behind the new rules, has said it is prepared to make further changes as needed down the road.
Davies says FAIR won’t require Javelin to change as much as most other Singapore advisory firms, since its business practices are already in advance of the new rules. Indeed, he notes that this should be a key competitive advantage for the company, as was his vision for the business when he first started out in 2003.
“Javelin’s business model already fits the customer’s needs and long term investment objectives,” he says.
“We wouldn’t, for example, recommend anything to a client that we wouldn’t invest our own money in, or do for ourselves on exactly the same terms. Our long-term objective is the same as theirs – to see that they reach their financial goals. If they do well, so do we. That’s the way it should be.”
One life insurance industry executive who knows Javelin well concurs with Davies’ assessment.
“[Because Javelin has] higher than usual levels of investment expertise” among its staff, and, thus far at least, is the only advisory firm in Singapore yet to upgrade to a Capital Markets Services licence, “its advisers are able to give advice on more sophisticated investment options than most of the rest of the market,” says this executive, who requested anonymity.
“Other companies [are trying to go] this way, but right now Javelin is in the lead.”
Expansion plans
Although Davies can foresee a time when Javelin might outgrow its Amoy Street shophouse, he says he is not planning to open offices in other countries.
Singapore is “a great place from which to build a regional wealth management business”, he says. “So we have no immediate plans to set up any new offices in the region: there is more than enough for us to do right on our own doorstep.”
Instead, he channels some of his excess entrepreneurial energy into the Singapore offshoot of something called the Entrepreneur’s Organisation, a global network of some 9,500 entrepreneurs in 131 chapters in 40 countries.
“I get a huge kick out of being part of such a group of driven individuals, who are committed to growing their businesses while also looking for ways in which they can ‘make a difference’ to society,” Davies says.
