DBS Bank, together with J.P. Morgan Asset Management (JPMAM), has launched an investment solution that adjusts risks based on an investor’s life stage.

Through automated risk calibration, DBS Retirement digiPortfolio seeks to ensure a client’s retirement runway is well-optimized for growth, before gradually transitioning towards a more conservative portfolio mix near retirement.

The solution, said to be the first of its kind in Asia, is premised on the concept that investors should only take on risk appropriate to their life stage (early career, mid-life, and retirement). It plugs a long-standing gap in the market by enabling investors to take more risk earlier and moderate their risk when they approach retirement.

A pilot programme that has been progressively rolled out to select customers since late last year, DBS Retirement digiPortfolio proved highly effective in motivating them to start planning for their retirement, with nearly half of the investors made up of younger customers aged 40 and below.

About 70% of them opted to make recurring top-ups to their portfolios, which signalled that young investors are willing to make smaller but regular investments that will contribute meaningfully to their retirement nest egg when compounded over the years, DBS says.

Even as investors start to make withdrawals from their DBS Retirement digiPortfolio, it will continue to be professionally managed by the DBS and JPMAM investment teams.

Investors will be able to automate these withdrawals and be presented with a view of the longevity of these payouts, as part of its market-first proposition, later this year.

They will be able to see how these payouts contribute towards their broader retirement plan, which will comprise various other sources of passive income, such as CPF Life, traditional annuities, and endowment plans.

Investors in DBS Retirement digiPortfolio pay only a flat 0.75% annual management fee, which allows them to benefit from a fully automated experience and enjoy other features, such as making recurring top-ups and withdrawals at any time.

A portfolio can be created with a minimum one-time S$1,000 (US$745) lump sum investment, and customers can subsequently choose to top up their portfolio monthly with as little as S$100. They are also not subject to a sales charge, lock-in period, or withdrawal penalties.