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EFG Bank AG – Making the Right Decisions on Behalf of Clients


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INVESTORS who are busy running a business or leading a company may have limited time during the day to monitor their portfolios. In such cases they are more likely to leave investment decisions largely to a group of professional managers based on certain agreed-upon criteria.

Such discretionary portfolio management (DPM) offerings differ from investment advisory services, where ideas are presented to clients who ultimately make the decision to buy, sell or hold an investment.

“DPM is managed on a discretionary basis by a group of portfolio managers with investment parameters having been defined upfront by the client. Such pre-set operating rules free up clients’ time from day-to-day monitoring and decision making,” said Rebekah Chuan, Singapore CEO and Head of Investment Asia, EFG Asset Management.

EFG Private Bank has grown its DPM portfolio in recent years, and was recently awarded the Gold in this category at the BENCHMARK Private Wealth Awards 2017.

“Judging from the growth of our AUM (assets under management) from clients’ top-ups, we are delighted to report that our clients are satisfied with our offering,” she said.

She credits her team’s success to their efforts to understand their clients’ needs, and then working towards meeting them. To help them do this, the investment team works closely with their marketing colleagues to identify gaps on their clients’ financial situation before formulating a suitable investment plan.

“We always strive to have honest conversations with clients especially in terms of achieving their expected returns. We do not hesitate to counter-propose alternatives if a client’s request has an unbalanced risk/ reward trade-off which may not be aligned with his long term investment objectives,” explained Ms Chuan.

She noted that key to the DPM process is setting investment parameters that match a client’s risk appetite. Once those parameters are set, they are entered into the bank’s system to ensure that they will not be breached.

EFG Private Bank manages client portfolios on a total return basis, as opposed to relative returns which fluctuate with a certain reference point, usually a market index. Clients with specific return objectives may prefer to set a total return target rather than having a relative return target.

In terms of product selection, Ms Chuan said that all investment ideas involve both top-down and bottom-up analysis. As such, macroeconomics, industry drivers and company dynamics all play important roles in the bank’s selection process.

She said: “Whether it is a stock, a bond or a unit trust, we need to fully understand the investment idea. For a unit trust, we also need to ensure that besides the underlying investment, the investment house itself is properly managed, which may require additional due diligence process to be carried out.”

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