SmartKarma, a fintech company based in Singapore, will provide US-based Interactive Brokers LLC with equity research in the Asian market. This marks the first time that SmartKarma will be doing third-party research for professional investors of a US brokerage house. SmartKarma also operates a digital knowledge marketplace and this is the tool they will use to help clients of Interactive Brokers.
Interactive Brokers joining the race
This move has been seen by many in the industry as Investment Brokers LLC joining the rest of the big brokerage houses in outsourcing their research divisions. This has been an ongoing trend in a changing market and is only one way in which providers of tradings services are rethinking their research divisions.
This specific partnership, or collaboration, will see private clients of the brokerage house communicating with analysts from SmartKarma. They will be able to monitor sentiment and compare industry performance, effectively enhancing their understanding and accessibility to an extra 3600 companies around the world.
New regulations benefit SmartKarma
SmartKarma’s digital marketplace helps over 400 analysts distribute their research, and it is key to their expansion plan. Since the rules changed forcing investors to pay separately for their brokering services and their research, SmartKarma has worked quickly to take advantage of a niche that previously filled by in-house researchers. Since it’s platform allows many analysts to offer research, it is easily scalable to other other regions.
The company plans on expanding heavily into European and US financial markets, being encouraged by the positive reception to their Asian equity research product a few years ago when the company started.
In 2018, SmartKarma and Singapore Exchange (SGX) partnered up to make a C-Suite pilot program. SouthKarma has also signed up large investment banks as clients up to its Asian equity research product, among which was Societe Generale. These investment banks tapped into SmarKarma’s Asian equity research product to offer their institutional clients.
SmartKarma charges an annual fee of 7000 US dollar a year, which is a flat fee per user. The analysts are paid in accordance with the popularity of their research among those subscribers. Both Warren Yeh and Yochai Korn commented on the news of the collaboration between SmartKarma and Interactive Brokers.
Yen, who is the Head of SmartKArma US, is happy to offer the clients of Interactive Brokers a compelling solution to clients of the brokerage firm who were looking for independent insight into the Asian market. He added that bespoke research and modeling were all supported by their platform accessible to investors.
Korn, who is the Global Head of Market Data and Research of Interactive Brokers, is delighted to be working with SmartKArma as they will be able to offer their clients minute-by-minute insight and analysis. He went on to say that SmartKarma’s platform allowing direct access to Insight Providers helps clients make informed investment decisions.