Deutsche Asset & Wealth Management

In 2014, the asset and wealth management industry will continue to benefit from a stronger global economy. However a number of industry challenges remain, including the threat of inflation, the persistent low-yield environment in developed markets, unresolved European sovereign debt issues, emerging market volatility, and the changing regulatory environment. In our view, these factors will favour large managers able to exploit scale and efficiency to provide clients with sophisticated investment solutions.

DeAWM's strategy positions it well to benefit from industry and competitor trends. For 2014, further improvement is projected through both revenue enhancement and efficiencies, particularly from ongoing transformational infrastructure projects. Due to this, 2014 IBIT is expected to have significant improvement against 2013 performance. Since we will strive to continue to improve the quality of services offered to clients and deliver sustainable platform efficiencies the division is expected to progress well towards our IBIT target of € 1.7 billion by 2015.

Deutsche Asset & Wealth Management

KPI

Target 2015

 

Income before income taxes (IBIT)

To grow to € 1.7 bn

We will continue to enhance our presence in select markets, particularly by leveraging the Deutsche Bank Group's global reach. We are active in emerging markets, where rapid growth is driving wealth creation and increasing demand for asset and wealth management services. Our focused strategy also entails selective business portfolio optimization; e.g. we are aligning our wealth management business in the UK with our global focus on the wealthier client segments.

We will continue to expand our business with ultra-high-net-worth (UHNW) clients globally in 2014, making progress toward our goal of increasing by circa 50 % the number of UHNW relationships we have from 2012 to 2015. These sophisticated clients benefit from our global coverage model and integrated client service teams. The most sophisticated UHNW clients are also benefitting from the recently established Key Client Partners (KCP) desks, which were set up to provide seamless access to cross asset class, cross-border investment opportunities and financing solutions from us and third-party providers.

We anticipate that the polarization of investment preferences will continue in 2014, with more assets invested in alternatives and passive products. Another key trend we expect to continue, specifically in developed markets, is the increase in demand for retirement products, driven by demographic trends, and for outcome-oriented solutions. We expect invested assets in alternative and passive products to grow in the next year.

The passive business will benefit from the shift to physical replication exchange-traded funds (ETFs), which we initiated at the end of 2013 and which will continue during early 2014, making us one of Europe’s largest providers of direct replication ETFs. The success of the new physical ETFs offering will depend in part on sustained client demand for physical passive investments.

We will also continue to leverage the strengths of our active investment platform (i.e. in fixed income and dividend equity funds) and we will aim to build on our increasing collaboration with other departments of Deutsche Bank (including with PBC as a distributor of DWS funds in Germany, and with CB&S on assisting wealthy clients with their corporate financing requirements).

During 2014, we will continue to invest significantly in our operations and technology. For example, for our Asset Management investment platform we are implementing a comprehensive IT solution that will bring significant improvements in terms of efficiency and functionality. These initiatives are among a range of projects aimed at optimizing our geographic and operational footprint. The financial performance of the division will depend in part on the successful execution of these projects. It will also depend on growing assets under management, with an improved return on new assets. To achieve this, we will continue to leverage our integrated coverage model and expand our product offering.