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UOB discretionary assets grow threefold

UOB discretionary assets grow threefold

United Overseas Bank’s wealth management assets have grown to SGD 104 billion ($78.7 billion), thanks to growth in its discretionary portfolio management (DPM) business.

The bank reported a threefold increase in discretionary assets, where advisers initiate and execute trades based on agreed criteria with clients.

This contrasts with traditional advisory mandates, where the client approves each trade before it is executed.

The Singapore-headquartered private bank has five DPM strategies based on risk profiles: Asian Fixed Income, Global Income Asia Focused, Global Balanced Asia Focused, Global Growth Asia Focused and Global Equity Asia Focused. It also creates customised portfolios for clients.

UOB said the average returns from the portfolios have ranged from 10% to over 30% since they were launched in 2016.

The DPM solutions saw more uptake among clients that want to manage their own businesses and leave investment decision-making to the bank, as well as clients that need to delegate investment responsibilities, such as trustees.

UOB’s push into DPM is similar to what other private banks in the region are doing to better deal with regulations, the downward pressure on fees and relatively lower returns from assets.

Private banking executives also believe that as wealth transitions in Asia, the next generation will want to play a smaller role in the investment management process.

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