The Asia Pacific region’s increase in wealth and maturity has led to the demand for External Asset Managers (EAMs) and the creation of over 70 asset management firms in Hong Kong alone. At the end of 2017, EAMs were collectively managing US$91.5bn of private wealth – representing around 3%-6% of total client assets across Asia. Strong indicators that the sector is rapidly expanding to support this figure reaching 10%, reflects clients’ growing preference for the model of utilising independent advisors to manage their wealth and investment portfolios.

In light of these trends, we expect to see EAM roles become more mainstream and exciting career opportunities open up for experienced Relationship Managers from traditional private banks. But what exactly differentiates the EAM role from that of an RM and what would motivate the move from a private bank to an external asset management firm?

We’ve collated the top 5 benefits External Asset Managers expect when making the move to an EAM platform:

1. Access to a wider platform of products and services. The ability to partner with multiple private banks, allows high net worth clients to select a custodian bank according to their needs and deposit size. In addition to the private banks’ products, EAMs can support their clients with a broad range of other products including alternative investments, overseas property, tax and accounting services. Without the constraint of minimum deposit sizes, EAMs have the flexibility to consider higher quality services and emerging investment classes that allow them to attract a broader set of clients looking to diversify their asset exposure.
   
   

2. Flexibility on salary and commissions. RMs leaving private banks can expect better remuneration, that is on average 45% higher than from their previous employer. With bigger banks limiting salaries within title bands and providing discretionary bonuses of 2-3 months (up to 9 months in a Chinese institution), the flexibility and transparency of the EAM platform is appealing. A lower salary but generous revenue split around 60/40, or as negotiated, mean commissions are based on actual performance.
   
   

3. Reduced regulatory burden. Compared to private banks, the regulatory requirements for EAMs are less onerous, meaning lower compliance costs. Fewer rules around minimum account opening values and communications with clients in China, mean that onboarding of new clients and risk control measures are not barriers to business. EAMs can more easily access new and upcoming sectors.
   
   

4. Deeper client relationships. The core benefit of representing one’s client rather than the firm, is the depth of trust that can be built. Without the distraction of internal reporting required by traditional banks that take away from trading time, or the huge targets designed to cover the cost of the platform, EAMs have the time and incentive to identify and deliver investments in the interest of their clients. With full view of investments across different service providers and custodian banks, EAMs have the flexibility to choose between products and solutions that best fit their investment strategy, tailored to suit the clients’ risk profile. EAMs are not under pressure to meet targets for selling products, generating revenue or other KPIs. This helps to ensure EAMs deliver a higher level of stability than traditional investment advisors. The result is a long-term relationship that often means the client follows the EAM.
   
   

5. Work life balance. With less reporting and admin and smaller teams to manage (5-10 people vs 20 people), EAMs tend to experience more work life balance, and enjoy a boutique working environment that can be more flexible to accommodate family commitments.
   
   

If you are an RM with an entrepreneurial spirit, who feels that a move to an EAM platform would be an attractive career move, please reach out to discuss current opportunities. We meet with the candidates of a high calibre with solid banking experience – so if you are an external asset management company looking for a rising star to work within your organisation, please get in touch.