ILP Strategies for HNWIs: Maximising Your Wealth

Navigating today's financial world can be complex, especially for high-net-worth individuals (HNWIs) with sophisticated investment needs.

Think of building your financial future as crafting a fine timepiece – each component plays a crucial role in ensuring lasting value. Investment-Linked Policies (ILPs) are akin to these intricate mechanisms, combining the precision of investment opportunities with the enduring protection of insurance benefits.

Key takeaways:

• ILPs offer both insurance coverage and the potential for investment growth.
• Dollar-cost averaging helps smooth out market fluctuations.
• Unlimited free fund switches give you control over your investment mix.
• Death benefit provides a safety net for your loved ones.

Talk to us to unlock the potential of ILPs for your portfolio.

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DBS CIO Outlook

Given the current economic climate, with recessionary concerns heightened by trade tensions and wavering consumer confidence, DBS CIO Insights Q2 2025 suggests a strategic approach to portfolio construction¹.

For HNWIs exploring ILPs, this translates to a diversified ILP portfolio incorporating a mix of asset classes.

• Opportunities are identified in Investment Grade bonds (rated A/BBB), poised to benefit from potential deeper rate cuts.
• Additionally, growth opportunities are highlighted in China, post DeepSeek implementation and Europe, following Germany's policy shift.
• Finally, alternative investments like gold, hedge funds, and private assets are considered favourably positioned.

This diversified approach within an ILP framework allows HNWIs to balance risk and reward while navigating the current market landscape.

How ILPs Offer a Balanced Approach to Wealth Management in Uncertain Times

ILPs represent a financial solution that transcends the traditional boundaries between insurance and investment, providing HNWIs with a multifaceted approach to wealth management. These policies combine the protection elements of insurance with investment opportunities, creating a structured yet flexible vehicle for wealth accumulation, preservation, and transfer.

The balanced approach of ILPs is particularly valuable in today's uncertain market environment for several reasons:

1. Risk Adjustment Capabilities: Unlike fixed insurance products, ILPs allow HNWIs to calibrate their market exposure in response to CIO outlook recommendations, shifting between conservative and growth-oriented sub-funds as conditions warrant.
2. Holistic Financial Planning: ILPs integrate protection, investment, and estate planning elements within a single solution, streamlining wealth management for busy high-net-worth clients.
3. Tax Advantages: Depending on the jurisdiction, ILPs may offer specific tax benefits related to wealth accumulation and transfer. Consult local tax regulations for details.

Managing market volatility with ILPs: Steady hand of time

While market ups and downs are a natural part of investing, they can be concerning.

ILPs offer a way to navigate these fluctuations through dollar-cost averaging. Just as a watch's consistent ticking marks the passage of time, regular premium payments steadily distribute your investment, reducing the impact of short-term market dips. This measured approach allows you to participate in market growth while mitigating the risks of a lump-sum investment.

Flexibility and growth with ILPs: Adjusting to life’s rhythms

Like adjusting the band of a watch to fit your wrist perfectly, your investment strategy should adapt to your evolving needs.

ILPs offer this flexibility through unlimited free fund switches, allowing you to seamlessly move your investments between different options within the policy. This adaptability empowers you to respond to new market opportunities, adjust your risk tolerance as life changes, and actively manage your portfolio for long-term growth aligned with your financial goals.

ILPs and planning your legacy: An enduring inheritance

A treasured timepiece, often passed down through generations, symbolises enduring value and legacy. Similarly, planning for the future and ensuring the seamless transfer of wealth is paramount for HNWIs.

ILPs provide a valuable tool for legacy planning by offering a death benefit (a guaranteed sum paid to your beneficiaries regardless of market performance). Moreover, ILPs offer the potential for continued growth, further enriching the legacy you leave behind.

Making the most of your ILP investment

Regularly reviewing the performance of your chosen sub-funds and utilising the unlimited free fund switch option allows you to fine-tune your investment mix, much like a watchmaker meticulously calibrating a movement for optimal performance.

A long-term perspective, like the enduring craftsmanship of a fine watch, is generally recommended for ILPs. Regularly checking and adjusting your portfolio ensures it remains aligned with your evolving needs and risk preferences.

Note: If this sounds like too much work and you prefer an accumulation solution to “buy-and-forget”, consider endowment insurance policies instead.

Exploring ILPs with DBS Treasures: Your Personal Guide to Financial Timekeeping

At DBS Treasures, we understand the intricacies of wealth management for HNWIs. We offer personalised guidance and expertise to help you navigate the world of ILPs, much like a trusted watchmaker guides you in selecting the perfect timepiece.

Our dedicated Relationship Managers provide expert insights into how ILPs can complement your overall financial plan. We invite you to connect with a DBS Treasures Relationship Manager to discuss your financial aspirations and how ILPs might fit your unique situation.

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Sources:

¹ DBS Chief Investment Office, 27 March 2025. CIO Insights 2Q25: Build Resilience Amid Tariffs

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Disclaimers and Important Notice
This article is for information only and should not be relied upon as financial advice. Any views, opinions or recommendation expressed in this article does not take into account the specific investment objectives, financial situation or particular needs of any particular person. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.