With the continued growth of the External Asset Management sector, we are seeing more roles open up for experienced Relationship Managers from traditional private banks. But hiring and retaining the right talent for firms is harder to achieve than some expect. Through our experience managing both sides of a placement, we’ve identified the top 5 obstacles EAM platforms must overcome to attract top talent.

1. Clients may not follow their Relationship Manager immediately. When an RM transitions from private banking to independent asset management, the expectation is that clients will follow. However, high-net-worth clients may hesitate to leave established private banks for new EAM platforms. Transferring their investments to a new platform, even if the firm is established, may take time.

Overcoming the challenge: EAM platforms need to invest in their brand and marketing to propel the name of their platform. Thought leadership not only gets the name of the platform out, but it pushes their point of view and builds credibility. Publishing insightful newsletters, relevant market updates and distributing powerful curated content should be a priority. Communicating the size of the funds managed and growth achievements can also build client confidence.

2. The lack of a robust client base within EAM platforms. In many private banks especially the ones with Chinese background, high-net-worth clients are assigned to Relationship Managers. They have leads to approach and pitch to. EAM platforms don’t provide that. RMs successfully moving to EAM platforms stop identifying themselves as employees and tap into their entrepreneurial spirit. With the chance to spend more time with clients, RMs are expected to create deeper client relationships to drive greater investments. If the RM doesn’t have the confidence they can do that on their own, they will be unlikely to join an EAM platform.

Overcoming the challenge: EAM firms need to invest in the infrastructure to support their Relationship Managers. Creating corporate events to engage and attract high-net-worth clients is one approach. Golf tournaments, test drives and special interest events - perhaps hosted in partnership with insurance partners - can deliver the experience expected by clients. Forward thinking platforms are building small marketing and events teams to strategically support RM’s generation of leads.

3. The focus on short term results. RMs can be immediately pressured to produce results to drive income. This isn’t realistic as it can take 2-3 months to open a private bank account, which can deter potential candidates to make the move to an External Asset Management platform. Even if high-net-worth clients are following their Relationship Manager, they may not move their entire investment immediately, but wait to check the stability of the EAM platform’s approach first.

Overcoming the challenge: EAMs need to adopt a longer-term approach. Give RMs time to set up by offering a basic salary with commission, Bloomberg access and phone for at least the first few months. Agree an extended delivery timeline for results from RMs.

4. Infrastructure is still in the development stage. RMs within private banks receive the full support of the system: a strong client base to approach, assistant RMs to complete documentation, compliance managers to check investment deal terms, and dealers to process transactions on their behalf. Within an EAM platform, RMs are expected to provide a wider range of services, which they may not have first-hand experience in conducting. Moreover, this approach can take away from their time with clients.

Overcoming the challenge: EAMs must invest in their infrastructure by hiring assistant RMs and compliance managers, effectively building support services to attract and support Relationship Managers.

5. Lack of knowledge and experience in operations among EAM platform owners. It is easy to open an EAM platform and we’ve seen many industry cross-overs to get into the market. However, an EAM owner without financial industry knowledge can deter quality Relationship Manager candidates. In a sector where relationships with private banks make it easier to do business, to move quickly and navigate compliance requests, a sound financial industry background can determine the ultimate success of EAM platforms.

Overcoming the challenge: EAM owners without personal financial industry experience must hire a Managing Director that the RMs can respect and follow, to manage the team.

Overall, these challenges point to the need for time, patience and an investment in infrastructure if an External Asset Management platform is to attract the right talent to support its success. We are here to advise EAM platforms on how to build teams and to help RMs find positions within firms that will support their success. If you are a Relationship Manager 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 candidates of high calibre with solid banking experience – so if you are an EAM looking for a rising star to work within your organisation, please also get in touch.