Hi KPO,
as usual, thank you for your comments and inputs, keep them coming! Chiming in on a few topics: 1) StashAway is not a real-time trading system, and as you know we do not optimize for super-short term decision making (i.e., customers wanting to change investment strategy more than 1 time during the day). To make the investment process efficient and be able to offer things like fractional shares, we need to trade all of our customers' orders in bulk. This means we need to have a cut-off time. We will keep working on making the cut-off time later and later, but to be honest this is not a high priority as it solves a problem that affects a very very very small number of customers and that it's not core to our value proposition: we enable long-term intelligent investing, the 6pm-930pm time gap should not really matter. 2) On being able to match customers' orders: As mentioned by Nino, in order to be able to do so we would need a different license and a set of different processes and policies in place. The complexities involved are actually not trivial, and the benefits of having a broker license would mostly be for StashAway, rather than our clients (we would save on brokerage costs). We have made the conscious decision of not prioritizing this as we think we can invest our resources in improvements that will directly affect our customers (e.g., offering higher-risk portfolios + more exciting things in the pipeline!).
Do let me know if you have any further comments or question! As usual, I'm happy to jump on a phone call (+xxxxxxx) or grab coffee/lunch!
Thank you once again for your inputs! Michele
Oh well. Definitely much room for improvement.
Never knew you guys are not even doing netting off internal orders. What's stopping StashAway from getting a broker license? Wouldn't it be more cost effective in the long run? No need to answer the questions. Just thinking out loud.
Have a good weekend!
On Fri, Aug 17, 2018, 3:46 PM Nino Ulsamer < xxxxxxx> wrote: Hi KPO,
as it's getting very technical, let me chime in here - the reason why we start the rebalancing process a few hours ahead of the actual opening time of the stock exchange is that (1) with the large number of portfolios that we are rebalancing on a daily basis this is not a process that runs in a few minutes, but takes a significant amount of time to complete, and (2) we want to still have a bit of buffer before the trading day starts in the US for potential issues to be resolved - which luckily happens very infrequently. As you are certainly aware of, the team is very lean in order to keep costs for our customers low, therefore we need to space in some buffer time to ensure things are running smoothly - a fair trade-off in our opinion.
Your suggestions seem reasonable, but are unfortunately not as straightforward when it comes to the details of it. For example, in order to do what you describe in netting off of internal orders (customer A sells directly to customer B without going to market), it would require us to hold a broker license, which we do not have, as this is not a key part of our value proposition (again, not a trading platform, but rather a long-term investing platform). Also, looking at the logic of "revised orders" that you are suggesting, this would certainly impact our ability to offer fractional shares to our customers, as the volume of such revisions would typically be very small and therefore inflexible.
That being said, we are constantly working on improving the degree of automation and flexibility of our trading system, and as that is progressing we might be over time able to push back the time of rebalancing a bit, therefore increasing the time-span within which modifications to portfolios such as withdrawals or changes in allocations can still be picked up before the trading starts.
I hope this answers your questions, and please believe us that there are a lot of smart people working every day on improvements to our processes, but dealing with orders in the magnitude of what we are processing each day makes for some non-trivial problems to solve.
Please do feel free to continue reaching out to us in the future with concerns or questions you may have, your feedback is always appreciated! Best, Nino
Hi Rachel,
Thanks for the elaboration. It does sound reasonable but I still believe it is lacking in some ways.
The US stock market opens at 9:30 pm SGT. Between 6 pm to 9:30 pm, there's ample time to send updated/revised orders right? Technically, the backend should have detected a change in portfolio again and there's no need for rebalance (i.e sell and buy back). An hourly revised orders to the broker would easily solve this and add value to the customers (7 pm, 8 pm and 9 pm). In addition, I'm pretty sure not all the orders are sent to the broker as well (customer A needs to sell X and customer B is buying X, transfer at to each other at the same rate). In this scenario, my portfolio is no longer selling, simply put up a revised order to buy X from the market. If the backend isn't flexible enough to handle all these, how do you plan to scale more efficiently?
I may/may not be the first customer to encounter this scenario but I can't help but feel this can be handled much better.
On Fri, Aug 17, 2018, 12:06 PM Rachel Dance < xxxxxxx> wrote: Hi KPO,
Please let me elaborate on my previous email: Our system rebalances all customer portfolios at 6pm. Any changes that are made to your portfolio after that time will not be reflected in that day’s trading activity as trades will have already been sent to our broker. As we aggregate all our customer orders for trading to minimise trading costs and enable fractional shares for our customers, it is impossible to cancel or modify trades of any individual portfolio after the rebalancing has been performed; the orders are “locked” at that point, and will be executed no matter what.
As we are not a trading platform, the system has intentionally not been designed to allow individual manipulation of orders. In other words, nothing is wrong with the system, as it was designed to order in bulk, not to respond to individual orders.
Best, Rachel Hi Rachel,
It seems that you do not understand what is the issue here.
I made the adjustment before the sell orders are fulfilled. I think it was within the hour. It doesn't make sense to sell them and then rebuy them back because the number of units are definitely going to be different.
Of course I know I can change them back. You are not addressing the concern at all. If the backend is not capable of handling something like this, something is very wrong.
On Fri, Aug 17, 2018, 10:15 AM Rachel Dance < xxxxxxx> wrote: You likely adjusted right before rebalancing so the sell orders will be executed, but you can of course still change it back.
Hope that helps. Let me know if you need anything else!
RD
Hi Rachel,
Yes. I saw it and adjusted earlier but on second thoughts, I decided to adjust it back.
Quick question. I see pending sell transactions. Now that I adjusted it back, will the transactions still take place?
On Thu, Aug 16, 2018, 6:55 PM Rachel Dance < xxxxxxx> wrote: Just make sure you update your mobile app to be able to see it.
As always, let me know if you have any questions.
Best, Rachel
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