HelloGold currently does not buy back gold for two reasons. 1) we are not able to verify the integrity of the gold bar after it leaves our control and the control of our vaulting agent as we do not have assaying facilities at this point. 2) our business is able to offer our customers a narrow spread because we hold 1kg bars and not smaller bars - if we hold bars of smaller weightage, it would increase our costs and we would have to pass that onto our customers. That said, we intend to work with one of our partners next year on the feasibility of creating a retail physical gold product. If we proceed to offer that product, a buy-back provision will likely be offered.

In terms of the KFH product, there are a number of differences

gold - we use 999.9 finest gold which is the highest grade commercially available and this gold is fully allocated. KFH offers 995 gold which is lower grade and less valuable and it does not necessarily have fully allocated gold. This is important because allocated gold means that the gold belongs to you. whereas unallocated gold means that KFH is a debtor and owes you the gold as its creditor.

price - we provide the latest prices to our customers through our app. and as of now our prices (inclusive of our buy/sell fees) are better - our current buy price is RM176.09 whereas KFH is RM176.34 per gram. Our current sell price is RM169.17 whereas KFH's is RM168.20 per gram

transaction size - our minimum transaction size is RM1 for any buy or sell. KFH has an initial minimum of 10gm which is RM1763 and subsequent minimum purchases of 1g which is RM176.30

minimum balance - our customers can have a zero balance with us. KFH requires a minimum balance of 2g which is RM352.68

management fee - we charge 2% per annum to cover the costs such as insurance, vaulting and auditing of the gold. KFH does not charge for the gold account because it does not provide insurance and audit of the gold

statement - we update our customer holdings constantly through our app with the latest value of the gold based on the sell price. KFH only provides monthly statements

cash payment - our customers can bank their cash into their HelloGold account from any bank. KFH requires customers to open a KFH savings or current account

physical gold redemption - we enable our customers to redeem the physical gold and it is delivered to them but we charge for the gold coin premium differential, delivery and insurance. KFH offers physical redemption at the branch but i can't find out if they charge you for the gold coin premium differential

buy-back - we currently do not offer buy-back provision. KFH offers a buy back option provided that 1) the packaging and security seal of the physical gold remains intact; and 2) t The serial number and the barcode printed on the face of the packaging of the physical gold matches KFH Malaysia’s records

audit - our gold is audited twice a year by an independent precious metal audit firm. KFH does not offer any audit service to assure customers that the gold exists

daily reconciliation - our gold undergoes a daily audit of our customer and bar lists against the records of our vaulting agent. KFH does not provide details of the gold that it holds for its customers

insurance - our gold is fully insured. KFH does not have any insurance to cover its gold

gifting - our customers can gift gold to any customer in any denomination to 0.1 grams. KFH offers a similar gifting product for 1g and 2g

I hope this helps

robin

This post has been edited by robincflee: Jun 22 2017, 02:58 PM

We are not a bullion shop. Our main business model is to provide a gold accumulation product, a collateralised lending product through our partner, Aeon Credit, and a gifting service. The physical redemption feature is not core to our business model unlike traditional bullion shops but we offer with support from our vaulting agent.

We take delivery of 1kg PAMP bars which are audited every six months by the Inspectorate. For those familiar with international best practice, you will appreciate that the biggest gold fund in the world also use the Inspectorate to give assurance on the gold that they hold on behalf of their clients.

Our investors include Finlab which is JV fund between UOB, the Singaporean bank, and SGInnovate, a wholly-owned Singapore government fund. Our marketing partner is Aeon Credit Services Bhd, a listed company in Malaysia. Our auditors are Deloitte Malaysia. Our lawyers are Zaid Ibrahim.

This post has been edited by robincflee: Jun 22 2017, 03:17 PM

Starting to sound like typical ponzi/mlm/scam business whereby they focus mainly on piggybacking on other established organizations instead of own success.

The ability to pawn our gold for money/collateral for loan is nothing new, you're not innovating anything by simply partnering with Aeon Credit, don't really need to highlight that every single time where your business model is being questioned.

Also, stop highlighting Deloitte like they're such a big deal if they're your auditors. Auditors are - no matter how prestigious they are, basically your suppliers and they bow down to you because you're paying them. Everybody knows about Enron - who was their auditor? Ah......same thing with your lawyers too.

You can just say that you do not buyback your own gold because you don't want to since you only want to profit from your exorbitant fees, that would have been simpler. Buying your own gold back would essentially open up risks to you if gold prices surges up and you'd have to pay more than your cost, hence losing your profit.

Also, since you keep on emphasizing on your 1kg gold bar - I suspect even withdrawing gold from hellogold would be hard - sure I can buy and accumulate until I have 10g of gold - but you store 1kg gold bar at your vault, you're gonna chip off 10g if I want my gold?

Banks who are established also buys back their own gold, you know, so gold buyback is not limited to just bullion or gold shop.

Your mobile app and buyin 24/7 idea is great, makes life easier but again - your no buyback gold policy is a major turnoff. MAJOR turnoff. It also means that if I accumulate my gold with you, and one day you ship off my gold bar and I get a fake gold - you can just run away from the liability - saying postage is insured, etc but insurance doesn't cover much since posting precious metals are always risk and some postage doesn't even accept it.

There is ZERO confidence when you are promoting your gold but you yourself do not accept your own gold.

How can someone else be confident with your business when you do not even accept your own gold? Like literally if I go to your office and withdraw my gold and 2 seconds later I said "changed my mind, I want cash back", and you say "nope", what the heck is that? First thing anybody's gonna think is that "what shitty gold did you give me that you won't even accept it".

I don't think a Singapore government fund would invest in a business that it is uncomfortable with. I would encourage you to check the Finlab website if you want to verify their investment.

Say you have 10g of gold and you want to redeem the gold, you call our service centre and we quote you the price for converting the 10g fractional ownership of gold in the 1kg bar into a 10g bar. If you decide that you want to proceed, we buy back the 10g of gold from you at the prevailing price and add on the required premium for buying a 10g bar. We then place the order for the 10g bar and have it delivered to you. You can check the authenticity of the bar through the PAMP app that can be downloaded separately and managed by PAMP.

In terms of our fees, in response to another post, I did a quick check another local bullion provider and we are competitive

With regards to our loan product which we hope to launch by Q3, I think you will find that will be market beating in terms of its fee structure. But we are not able to release further information about the loan details at this point.

As I had explained in the earlier posts, we use established principles for managing our customers gold based on what is done for GLD which I am sure is a product that you are familiar with.

With regards to buy-back, I have also explained why we currently don't offer that service. In addition, our customers have not typically required physical redemption of their gold and therefore the additional cost of provinding that service does not make commercial sense for us at this point.

Last but not least, no one should save gold with any business that they are not comfortable with - whether it is ours or anyone else's. They should have complete confidence in the platform because they are relying on it to provide the services that are promised.

As an aside, Enron's auditor was Arthur Andersen

Gold has been at 1200++ level for so so long

XAU/RM is currently around RM5351 (as at 26 June 2017). It was at RM5,152 at the beginning of the year. so year-to-date is around 3.9%.

Gold is an asset that increases around the rate of local inflation over the long run. It is probably one of most accessible assets to hedge against local inflation and local currency risk.

I believe that gold is performing in line with long run expectations which is good - rather than bad. Why? Because investors can take risks and make money in other assets. But they all need an asset that will act as a hedge or safe haven - that asset is gold for many of us

Does this mean that if u choose 10KG gold bar then u can offer more lower cost to user?

Yes. As we are able to enjoy better pricing through the bulk purchase of 10kg, 20kg, 30kg worth of gold, we plan to lower the costs to our customers

When do you foresee this happening?

I think most of us wish that the fees doesn't look too punishing. If you could, please consider lowering the admin fees, or include extra benefits. The link with AEON for loan does not really appeal to those genuinely having extra money to spare to buy gold. As I see it, iIf they could buy gold, there's no reason to get a loan.

Does that top up fees (RM1.20) is for any amount deposited?

I would like to be in a position to lower fees in 2/3 years time

The top up fee is fixed for any amount

Regarding the loan product, our market survey has shown that this will be a popular product. Our customer see gold as a long term savings plan, and they don't want to sell their holdings. But they like the option of having a credit facility for emergency situation. It is as if you can get emergency cash against your pension fund - it is a useful feature because you wouldn't want to sell the shares in your pension portfolio

Dunno if this is the Geneva ver2?

My issue with this platform is the 2% fee. And sumore a top up fee and buy/sell fee . Sounds like you guys have a lot of ways to make money lol. Gold does not appreciate that fast unless there is a drive , say World War 3.

My basic rule of thumb in investment, it should be at minimum higher then your FD, of even better the KLSE. I mean, on an average, take the sifu's advice on the fundsupermart page and you could get an average between 7-10%.

Assuming the calculation of FD 4.0%, gold needs to appreciate by 6% minimum + 2% buy 2% sell.

I do have gold investment, but I trade constantly , like i may buy and sell within a week.

From a business perspective, I think the concept is great as it will/can lure the lower income group into gold investment or making the entry barrier lower. However for people who has the bullets, I personally do not think this is a good platform or I am not seeing a point here .

This post has been edited by Azurika: Sep 1 2017, 02:17 PM

HelloGold is designed to help people save regularly in the long run - more than a year ideally 3/5 years. For this type of customer, especially with the loan product that we will be introducing into the market and our gifting feature, we believe that HelloGold will work for them

HelloGold is not designed to be a trading platform - so for someone like yourself who wants to trade in and out on a weekly basis, HelloGold isn't right for you.

Exactly - the fees are just.....pointless other than to make hellogold money.

I'm assuming hellogold target market should be people of the lower income group and not those who have the means to regularly invest in gold - if you're able to put in, let's say 1k each month into gold, or a few grams - might as well just go with some bank's gold savings account with option to withdraw, it's pretty much the same thing with more confidence to banks and probably even higher returns for the investors.

Then we look at the other side which are those whom are not capable to put in a few grams in gold regularly, and let's say they can only get maybe a few ringgit into hellogold regularly - take like RM 50/month - any returns to the investor would be pretty much.....insignificant considering the high fees.

Doesn't seem to be much benefits to the investors. Yeah hellogold makes gold investing convenient, but I'm pretty sure not many people are willing to sacrifice returns for convenience.

Yes. I have appeared on the Edge a few times

I guess it is because I have more gold experience than anyone else in Malaysia given my previous job

If you look at gold as a way of making money in the same way as you look at equities, fixed income etc, then i can understand your view. However, I see gold as a hedge against inflation, currency risk, crises - it is like insurance. I always tell people that they should never invest in gold to make money. Why? Because in normal market conditions, gold is uncorrelated to most, if not all, asset classes. In normal market conditions, investors are better served seeking investment advice on securities, funds etc - they are more likely to enjoy above market returns. However, no one can ever predict when the next currency devaluation or crises will happen. In these tail-risk events, gold is typically negatively correlated to most assets classes. What we found in major financial crises is that gold is the only real diversification investment - in contrast, portfolios that were considered diversified showed that positive correlation attributes at times of severe stress. So I always tell people to think of gold as an insurance - you buy insurance every year for your car, your house, your health - and you always hope that they are a 'waste' of money and you will never have to claim. But when something bad happens, you are happy that you have insurance. In the same way, under normal conditions, you will invariably enjoy a better return with other investments. But when truly bad things happen, the gold could give you the liquidity you need.

Coming back to HelloGold, this is our value proposition to our customers - we will be launching our personal loan product with Aeon Credit soon so that our customers can get emergency credit without having to sell off their 'insurance'. The banks that you refer to don't provide this easy credit facility; nor do they allow you to transfer the gold to friends and family

1. It is good to diversify (you term it as "like insurance"). However, diversification is only worthwhile when a portfolio has reached a certain amount.

2. Your platform is aimed at lower income group.

3. However, low income group does not talk about diversification, as they don't even have a sizeable portfolio to talk about diversification

4. Your platform has high spread, and charges fees

5. So, for those investors with a certain amount in their portfolio to start diversification, they will not consider your platform because of the spread and fees

From the marketing point of view, talking about "insurance" / "diversification" puts you in a quandary. Your company will face difficulties convincing customers based on "insurance" argument. Or are you trying to ask the lower income group to "diversify" when they have not reached that level ?

Every income group has a need for diversification. The one that is most commonly used is investment portfolio diversification. In that sense, you are right - the market that we want to serve is unlikely to have an investment portfolio

But they do need diversification. Their income/asset portfolio is long ringgit denominated risk - salary, savings, EPF etc. Whereas a lot of their costs are US$-denominated - petrol, food etc are typically priced in the markets in US$. In the event of a devaluation, their portfolio will be positively correlated and there will be a mismatch between their income/assets and their costs. They need to have something else that gives them the ability to diversify out of a long ringgit exposure. I believe that gold can provide that diversification for them and also enable them to have a inflation-linked return.

I can't gauge the threshold of the portfolio of your intended customer. Can you put a rough number so that we can talk on the same page ?


*edit* - I can see your sell price in your website. Where can I see your buy price ?

This post has been edited by Showtime747: Sep 11 2017, 10:00 PM

My issue is still the fee's involve even for holding gold. Since your a sifu in this industry, whats the projection for gold in 5 years ? Lets see if its worth the numbers.
Of course if US N. Korea and US launch a few more rockets, its a good thing for us right ?