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DBS and JP Morgan debut Asia’s first automated retirement investment portfolio

Douglas Toh
Douglas Toh • 3 min read
DBS and JP Morgan debut Asia’s first automated retirement investment portfolio
A pilot programme launched late last year has already garnered significant interest. Photo: Bloomberg
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DBS Bank and JP Morgan Asset Management (JP Morgan) have launched Asia’s pioneer global investment portfolio which aims to revolutionise how investors, both young and old, invest and plan for their retirement. The innovative portfolio automatically adjusts asset allocation based on an individual’s life stage and retirement timeline, known as a glidepath, and also automates drawdowns to meet retirement income needs.

Termed the DBS Retirement digiPortfolio, the initiative is premised on the concept that investors should only take on risks appropriate to their three different life stages, defined as; early career, mid-life, and retirement. 

The portfolio, which is professionally managed by the DBS Chief Investment Office and JP Morgan asset management (JPMAM) teams, addresses a longstanding market gap by allowing investors to assume more risk during early career stages and gradually reduce it as retirement approaches, allowing greater financial peace of mind in later years.

For instance, a 30-year-old customer’s portfolio would initially prioritise equities over fixed income and cash to capitalise on long-term capital appreciation. As the same customer approaches the retirement age of 65, the portfolio automatically adjusts to gradually reduce equity exposure and give majority allocation to fixed income, ensuring stability and mitigating market volatility.

Prior to the introduction of the DBS Retirement digiPortfolio, investors seeking to align their investments with their retirement goals faced frequent transaction or switching costs as they adjusted their portfolio mix over time. With the portfolio, a flat 0.75% annual management fee grants investors access to a fully automated experience utilising the glidepath strategy, allowing seamless planning through different life stages.

Moreover, investors can enjoy additional benefits such as the ability to make recurring top-ups and withdrawals at their convenience. The portfolio requires a minimum one-time lump sum investment of $1,000, after which customers can choose to contribute monthly with as little as $100. Importantly, investors are not subject to sales charges, lock-in periods, or withdrawal penalties, enhancing flexibility and accessibility to the platform.

See also: Congratulations, your stock is now a privatisation target but here’s the twist

A pilot programme, introduced to select customers since late last year, has already garnered significant interest. Nearly half of the investors were aged 40 and below, indicating a strong appeal to younger demographics, while 70% of participants opted for recurring top-ups to their portfolios, demonstrating a willingness to make consistent investments for long-term financial security.

Importantly, even as investors begin withdrawing funds from their DBS Retirement digiPortfolio, it will remain under the professional management of DBS and JP Morgan. Investors will also be able to automate these withdrawals later this year, while being presented with a view of the longevity of these payouts, as part of its market-first proposition.

Crucially, investors will gain insight into how these withdrawals align with their comprehensive retirement plan, encompassing diverse passive income streams like CPF Life, traditional annuities, and endowment plans.

See also: Should you be topping up your CPF account?

“DBS Retirement digiPortfolio is designed with careful risk calibration over decades in mind. This effectively breaks down big hurdles for customers who want to plan for retirement, yet find it too daunting. It also serves to remove some of the inertia we hear around retirement planning, by making it not only more accessible to all but also more affordable to start with,” says Ling Seng Chuan, head of financial planning, insurance and investment, DBS bank.

Jacklyn Goh, head of Singapore intermediaries, JP Morgan, adds: “We are excited to partner with DBS to introduce an industry-first personalised retirement proposition for Singapore investors planning for their retirement needs. The personalised feature is what sets this retirement solution apart and brings retirees’ experience to the next level – we are proud to enable the customisation leveraging our investment insights, technology resources and model-advisory portfolio capabilities.”

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