UOB discretionary portfolio assets tripled in 2017

It identified client segments that preferred DPM solutions for their investments.

UOB Private Bank’s discretionary portfolio management (DPM) assets tripled in 2017, bringing its total wealth management assets under management (AUM) to $104b. 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 a press release, 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 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,” the bank said.

The average return of UOB DPM portfolio has ranged from ten to more than 30% since the Bank launched the solution in 2016.

Q4 was a blast for UOB as its earnings jumped 16% YoY to $855m. The growth was driven by increased in net interest income, fee and commission income, and net trading income. UOB’s fee and commission income climbed 10% to $585m from strong growth in its wealth management, fund management, and credit card businesses.