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Deutsche Wealth launches hybrid advisory platform

The platform, which has been launched in Hong Kong and Singapore this month, will provide flat advisory fees to investors.

Deutsche Bank Wealth Management has rolled out “dbXpert”, a platform that bridges the gap between transactional advisory and wealth discretionary mandates, according to a statement from the firm.

The platform is a hybrid solution that combines advisory and discretionary portfolio management services, in which it recommends a multi-asset portfolio based on a client’s profile, though the client will still have the final decision to accept the recommendation, a Hong Kong-based spokeswoman of the firm said.

Clients are also able to make customisations with the recommendations, she added.

Besides asset allocation recommendations, the platform also provides weekly “investment top picks” across equities, bonds and mutual funds, according to the statement.

“In Asia, discretionary portfolio management has traditionally been less popular than transactional advisory as clients like to retain control over their portfolios,” Yim Lok, head of Deutsche Wealth for emerging markets, said in the statement.

This is true for a number of banks operating in the region who have the majority of their business in advisory, including Pictet Wealth Management and Bank of Singapore. For Deutsche Wealth, its discretionary business accounts for only around the “mid-single digit” area of its Asia AUM, the bank said previously.

“With dbXpert, we allow clients to directly and independently manage their portfolios while still leveraging our best thinking and systematic portfolio health checks approach,” Yim added.

Portfolio health checks are done on a monthly basis, according to the statement.

The spokeswoman said that the platform is available on Deutsche Wealth’s existing online platform, Deutsche Wealth Online.

The bank’s platform is similar to UBS Wealth Management’s UBS Advice, which is an advisory platform that builds portfolios based on a client’s needs and risk profile. It was first launched in Asia in 2015, and in 2017, UBS Group decided to bring the platform to other banks in a white-labelled version.

The minimum investment of dbXpert is €2m ($2.2m), according to the statement.

Flat fees 

Deutsche Wealth’s new advisory platform also offers a flat fee pricing model, according to the statement.

“Fee transparency and independent advice are critical,” said Tan Wei Mei, head of advisory and investment solutions for emerging markets.

“It is therefore essential that we move towards the contracted advisory service model where clients pay us an advisory fee, rather than transaction fees and trailer fees.”

Transparency of fees continue to be an issue in the region, with one out of 10 high net worth clients saying they do not understand wealth management fees at all, according to a recent survey conducted by EY.

Currently, the percentage of AUM and hourly support are the most common payment method in the wealth management industry, the report said.

“The answer is not simply lowering fees, but rather a combination of increasing transparency and predictability when it comes to pricing models, and equipping advisors with ways to communicate value beyond investment returns,” Elliott Shadforth, Asia-Pacific wealth and asset management leader at EY, said.

Part of the Mark Allen Group.