Deutsche confirms its faith in wisdom of guided architecture
Yuri Bender reports on which of the bank’s partners are benefiting most
Deutsche Bank has re-iterated its commitment to the guided model of open architecture, introduced last year, which offers customers of its Private & Business Clients division access to products from eight preferred external providers, in addition to in-house funds manufacturer, DWS Investments.
Dominic Blum, head of the division’s product management department said the bank was “100 per cent convinced about the guided architecture model.” The bank was also convinced that it had made a “sustainable selection.” He said that more external partners might be added in the future. All partnerships were reviewed following changes in responsibilities of the bank’s Group Executive Committee in September.
The list of partners comprises Alliance Capital, Fidelity Investments, Franklin Templeton, Invesco, Merrill Lynch, Morgan Stanley, Schroders and UBS. Critics have claimed that only Fidelity and Invesco have enjoyed substantial inflows from the arrangement, and that the others have suffered due to lack of brand awareness in Germany.
The head of Axa Investment Managers in Germany, Christian Wrede, has claimed that Axa has received E100m from Deutsche Bank branches, despite not being on the list, while sister company Alliance Capital paid substantial marketing costs to get on the list, while not receiving any new business in return.
In response to this, Mr Blum said: “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. But if the market environment changes, different fund picks will emerge and inflows will come.”
Managers are not guaranteed inflows, purely by being on the shelf, said Mr Blum. However, he said that by jointly developing solutions with the bank, timed to benefit from market moves, partners have been able to attract extra funds. “Some partners have been ready to deliver something new. We have marketed inflation protection products and received new inflows. We did this with UBS.”
