Why take an interest in Lili?
Because the project’s goal is to make the offering and placement of financial asset allocations cheaper and more efficient by setting up a site that is competitive and transparent.
Because this project meets the requirement for clarity, simplicity and education expected by individuals and companies alike who lack the financial infrastructure and expertise to actively monitor the best ways to invest their cash.
The website is hosted by Microsoft Azure since December 2016, and fully meets robustness, scalability and availability requirements.
The platform currently offers the following operational services: * Allocator: management and exposure of profiled Portfolio Models based on an investment scope consisting exclusively of funds. Using crowdsourcing, this universe has been coconstructed by the Allocators. * Client: research, comparison and subscription of Portfolio Models, with each model able to be offered within a tax framework tailored to the investor’s projects (for example, life insurance policies).
Each Member has one anonymous Passport, which is a prerequisite for accessing the Portfolio Model gallery. It is not only a regulatory requirement, but also essential for being able to personalise Client pathways and offer the most appropriate approach for their profile. It also gives Distributors useful data to help them in their KYC processes.
The Client inputs their Passport through a simple procedure consisting of three multiple choice questionnaires about their assets, personal circumstances and financial culture (risk appetite). The elements provided currently have several impacts:
1. They determine the investor profile using the criteria established by each Allocator;
2. They act as a filter on the Portfolio Models displayed;
3. They allocate a relevance score to each solution (e.g. a life insurance policy) to embed a chosen Portfolio Model.
It is expected that by 2019, Passports will be stored in a Blockchain database. The aim of this decentralisation is to create a single data source to reduce the cost of KYC procedures operated by the
various chain participants. The Passports constitute unfalsifiable sources of information certifiable by trusted third parties. Under no circumstances will they replace their KYC procedures. They have been prepared under the responsibility of the Regulated Entities which have access to them.
Designed by Allocators, the aim of the Portfolio Model is to help Clients designing their personal portfolios, or help other Allocators designing their Portfolio Models. The management of the Portfolio Model complies with regulatory and operational constraints indicated in the prospectus of the Financial Instruments referenced on Lili.
Lili acts on the assumption that the content and past behaviour of a Portfolio Model reflects the quality of the advice. However, it should be noted that the quality of the advice (reflected by financial indicators) varies according to the analysed period (six months, one year, three years, etc.), and that past performance is not an indicator of future performance.
MODEL OF MODELS
This is one of Lili’s major innovations. Any Member may replicate the content of a Portfolio Model in a real portfolio (if they are a Client) or in another Model Portfolio (if they are an Allocator). In the latter case, we refer to a model of models, or by extension, an Allocator of Allocators.
Replication is a service offered to Clients and Allocators. What types of people are interested in this concept?
1. Any wealth Allocators who are not allocation specialists and who prefer to rely on their business, tax, and legal expertise;
2. Any Allocators specialised in a market, sector, class or strategy;
3. Any Allocators specialised in diversification and who will rely on the models of specialised Allocators;
4. Any Clients entrusting the management of their portfolio an Allocator per component (management mandate).
THE SMART CONTRACT
In 2019, the Lili marketplace will become an ecosystem dedicated to the promotion and sale of advice (via Portfolio Models). The process will be monetised by a Smart Contract deployed on the Ethereum Blockchain. This smart, public and unforgeable contract will govern the provision of the following services:
* Logging of Passports and their certifications;
* Processing of management fees;
* Processing of subscriptions;
* Logging of order marking;
* Management of Distribution Agreements.
The Smart Contract will be the custodian of Passports in a distributed database. A passport is a collection of encrypted (hashing) attributes posted exclusively by its holder. The advantage of a distributed database is that it minimises the time-consuming KYC procedures performed by almost all players in the execution chain.
Each Passport attribute is a four-digit code (two letters followed by two numbers) indicating the selected response to a specific question. For example, RT04 indicates that the passport holder has four children, OC01 that they are the head of a company. Through 20 questions, the passport content is reflected in a string of a minimum of 80 characters encrypted via the public key set up by the holder when they signed up for the contract.
A passport’s attributes may only be updated by the passport holder. Each attribute contains a history of approvals made (hashing by the contents of the attribute) signed by a trusted third party. This pooled approach allows the cost of these procedures to be reduced.