UNITED Overseas Bank Limited ( UOB ) has reported a three-fold increase in Discretionary Portfolio Management ( DPM ) assets under management ( AUM ) for its Private Bank clients in 2017, helping to drive the Bank’s total wealth management AUM to S$104 billion ( US$79 billion ).

DPM solutions are where advisers initiate and execute trades based on agreed criteria compared with traditional advisory mandates, where the client approves each trade before it is executed. According to figures released by the Asian Private Banker, DPM in Asia grew at an industry rate of nine per cent year on year in 2016.

Ong Yeng Fang, managing director and head of UOB Private Bank, says: “The guiding principle we have followed as we have enhanced the capabilities of our Private Bank over the last three years has been to manage our clients’ wealth as if it were one’s own.”

“What has contributed to the growth in our Private Banking business is the increasing confidence our clients have in our professional in-house team as they see the investment results we achieve on their behalf,” Ong says.

UOB has found that certain client segments in particular prefer DPM solutions:
• Clients too busy managing their own business( es ) to follow markets closely;
• Clients who prefer to let professionals make granular investment decisions; and
• Clients who need to delegate investment responsibilities, such as trustees.

UOB’s DPM solutions have been constructed to respond to the changing market environment in a more flexible and timely manner. UOB Private Bank portfolio managers are empowered to adjust the asset allocation of the mandates as market conditions change.

UOB uses a process of managing draw-down risk by controlling the maximum percentage a portfolio can fall using various hedging strategies. This requires discipline in risk control and the ability to anticipate and to mitigate market risks.

Neo Teng Hwee, chief investment officer and head of investment products and solutions, UOB Private Bank, says, “As we focus on the draw-down risk all the time, we have various hedging tools to mitigate different risks in the market. With markets at current levels and asset valuations looking high, clients with DPM solutions are better positioned to navigate the markets should volatility increase. If markets continue to grow, our clients will also benefit from steady returns.”

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