DBS' hybrid platform to serve retail investors

Ms Evy Wee, DBS' head of financial planning and personal investing, at the media briefing on digiPortfolio yesterday. The hybrid human-robo investment platform will be available to retail investors with at least $1,000 to invest, allowing them to buy
Ms Evy Wee, DBS' head of financial planning and personal investing, at the media briefing on digiPortfolio yesterday. The hybrid human-robo investment platform will be available to retail investors with at least $1,000 to invest, allowing them to buy a portfolio of exchange-traded funds.PHOTO: DBS

It combines computer algorithms with wealth team's strategies

Retail investors with at least $1,000 to invest will be able to tap DBS Bank's wealth management expertise to buy a portfolio of exchange-traded funds (ETFs) by the end of this month.

The robo-investment platform, digiPortfolio, combines investment strategies from the bank's wealth management team - which traditionally serves only private banking customers - with computer algorithms to help automate the investment process.

This sets the Singapore bank apart from the other nine digital advisory services in the market, which provide portfolio advice with no direct human involvement.

At a media briefing yesterday, Mr Jeremy Soo, DBS' Singapore head of consumer banking group, said technology has allowed customers to use some of the services that were "almost impossible" for them to access previously.

"Either you bring a lot of money to join a wealth management platform, (or else) all these things are not available to you," he said.

For a start, the bank is offering retail investors two portfolio options on its online banking platform.

The Asia Portfolio, which requires a minimum investment of $1,000, comprises Singapore Exchange-listed ETFs that provide investors with exposure to the Singapore, China and India equity markets, as well as the Singapore bond markets.

This portfolio can be purchased by customers with no prior investment experience.

For those who are looking for global diversification, they can choose the Global Portfolio with UK-listed ETFs, starting with US$1,000 (S$1,390).

Both options come with three different risk levels, which translate to a collection of four to seven ETFs, representing between 200 and 13,000 holdings in a single transaction. A flat annual management fee of 0.75 per cent is charged in return for portfolio construction, monitoring and rebalancing services.

"Everything is done in-house," said Ms Evy Wee, DBS' head of financial planning and personal investing. "The money that the investor puts in does not leave the bank and will not get passed to another asset management firm."

The technology and intellectual property developed by the bank allow it to ensure that there are no further sales charges, platform fees or transaction fees involved. There is also no lock-in period.

A team of portfolio managers led by Mr Christophe Marciano, DBS' head of discretionary portfolio management, will review the portfolios on a quarterly basis to ensure that they remain resilient to market volatility, provide optimal returns, and remain aligned to DBS chief investment office's views.

Mr Marciano said when rebalancing is deemed necessary, "there are no constraints to do so more frequently".

This hybrid human-robo investment platform was first made available in March to DBS Treasures customers, who have at least $350,000 in assets under the bank's management. By extending this service, the lender aims to lower the barriers to investing for all. It hopes to eventually allow investors to use their Supplementary Retirement Scheme and Central Provident Fund accounts to invest in these portfolios.

The early access sign-up for the service is now open, and will close on Sept 30. The bank will inform those who have signed up once they are allowed access. The service will eventually be fully opened after this introductory phase.

A version of this article appeared in the print edition of The Straits Times on September 03, 2019, with the headline 'DBS' hybrid platform to serve retail investors'. Print Edition | Subscribe