Deutsche: up to speed with change
Clients need plenty of encouragement to venture into unfamiliar territory, writes Yuri Bender
Klaus Martini, chief investment officer for private clients at Deutsche Bank, advising assets of more than ?300bn, sometimes feels he faces an uphill struggle. When he has made cases for investment in more unusual asset classes such as commodities, branch consultants can be slow to take him up. “There is a long education process to explain to people why they should be in equities and bonds,” laments a frustrated Mr Martini. “Even more education is needed around forex and commodities.”
Hand in hand with his task of adjusting purchasing habits comes dampening client expectations from the 9 per cent of days gone by to a low return environment.
“Equity returns from developed markets are lower,” admits Mr Martini. “But we still want to propose something with an edge for our investors. So we say you should stay invested in Europe and the US. But there is also something else which is growing: Asia – why don’t you have a look at this?”
Forgiving past failures
Some Deutsche clients have already had their fingers bitten by the tiger economies, so private client advisers must come back to arguments about the enormous growth in Asia and the positive impact of staging the Olympics in Beijing in 2008 and the World Exposition in Shanghai in 2010.
“The most important goal for me is to get clients into the markets quickly,” says Mr Martini, who made a call on Asian equities already some time ago. His department’s current recommendations include BRIC (Brazil, India and China) funds managed by Deutsche’s DWS subsidiary, Templeton’s Asian Growth fund, HSBC’s Indian equity fund and a variety of certificates issued by Deutsche Bank.
Templeton is on a list of eight preferred providers, signed up by Deutsche Bank as part of its “guided architecture” model in May 2003, but HSBC is not on the list. Other fund groups can still receive inflows from the bank’s clients if they have good products. Similarly, the preferred providers are not guaranteed new money.
“Some partners in the current market environment do not have funds with top quartile performance, so they are not included as top picks, so they don’t receive inflows,” comments a Deutsche spokesman. “But if the market environment changes, different fund picks will emerge and inflows will come.”
