Robo-adviser Aghaz Investments has launched its services in a bid to bridge the gap in Shariah compliant investments in the US.
“Based on the current investments being made in the country, Muslims in the US certainly have the spending power, the disposable income and the savings appetite. I believe there are a 100,000 potential customers in the US that can use a service like ours,” Khurram Agha, the founder and CEO of Aghaz Investments, opines.
Located in the US, Aghaz Investments is the brainchild of Khurram, an active investor himself, that aims to provide an investment service to customers in a manner that is aligned with their values.
“I founded Aghaz Investments about a year ago because I felt that Muslims in the US do not have efficient solutions when it comes to saving money for their goals. I wanted to come up with an optimal way for Muslims and all values-oriented individuals to save money according to their beliefs,” Khurram tells IFN.
Aghaz Investments, an automated investment management platform, creates investment portfolios which are optimized for an individual customer’s goals and values, allowing customers to save money without compromising on their values.
Regulated by the Securities and Exchange Commission in the US, Aghaz is registered as an investment advisor and has worked with other regulated entities for custodial services across the US.
The largest hurdle Aghaz faced when setting up was understanding the customer demographic of Muslims in the US.
“The Shariah compliance and regulatory aspects of an investment are some of the things that Muslim investors look for. In the last few months, one of the biggest learning experiences I had was learning to tailor our offering towards the Muslim mindset,” explains Khurram.
The investment management platform has catered to hundreds of customers since launching a few weeks ago and offers services that are fully diversified between US stocks, Sukuk, precious metals, real estate trusts and cash. Investment portfolios created for customers are managed end-to-end by Aghaz and customers are also able to set up different recurring deposits for each of their investment goals.
Khurram acknowledges that it is a competitive segment as active players in the market such as Wahed Investments have a strong foothold and customer base in the country.
Nevertheless, Aghaz is working on distinguishing itself from competitors through its unique and innovative offerings.
“I believe that we have a better fee structure which is a subscription-based model and we also offer goals-based investing and further customizations based on our customers’ values which our competitor does not offer.
“Aside from that, we also provide Zakat calculators, Halal stock screeners, wealth calculators and many other financial health scenario builders that we believe nobody else is offering in this market. So we hope to capitalize on our differentiated offering in the US market,” Khurram opines.
In early March this year, Aghaz partnered with DriveWealth’s cloud-based brokerage platform Autopilot to help its users customize their portfolios. DriveWealth is registered with the US government as a broker dealer and custodian.
The brokerage is insured with the government for up to US$500,000 per account, and as such, any account created by Aghaz with DriveWealth is protected by the US government’s insurance in the event of any liability.
Taking a look ahead, Aghaz looks to rope in several thousand customers and hopefully manage several million dollars in assets under management. The investment advisor also hopes to expand its offerings to Canada, the UK, Southeast Asia and the Middle East.
“We are working with partners to either launch organically or as part of joint ventures or white label opportunities in those markets and we are also exploring business-to-business offerings for other financial advisors out there as well,” explains Khurram.