External Asset Manager (EAM)
An External Asset Manager (EAM) is an independent financial advisor or firm that manages investment portfolios on behalf of clients, while maintaining a close partnership with one or more custodian banks. Unlike internal asset managers employed by a bank, EAMs are not directly affiliated with the bank holding the client’s assets. This model allows clients to benefit from personalised and impartial financial advice while keeping their assets safe with reputable financial institutions.
EAMs operate under a discretionary, advisory, or hybrid mandate, depending on client preference. They typically offer services such as wealth management, tax optimisation, estate planning, and succession strategies, particularly catering to high-net-worth individuals (HNWIs) and family offices.
IAM – Independent Asset Manager
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EAM
Examples
In Switzerland, many private banks such as Credit Suisse, Julius Baer, and UBS collaborate with hundreds of EAMs. For instance, a high-net-worth individual may choose to work with an EAM for personalised wealth planning. The EAM tailors the investment strategy to the client’s needs while leveraging custodial services, research, and execution platforms of a partner bank like UBS. The bank safeguards the assets and provides reporting tools, while the EAM delivers bespoke advisory and portfolio management.
FAQ
Are external asset managers regulated?
Yes, EAMs are regulated by financial authorities in their jurisdictions. For example, in Switzerland, EAMs must comply with FINMA regulations and adhere to AML and fiduciary responsibilities. The EU and other regions have similar licensing and compliance frameworks under MiFID II and local laws.
Why do wealthy clients use external asset managers?
Clients often seek EAMs for their objectivity, personalized service, and independence from bank sales incentives. EAMs can also offer multi-bank strategies, allowing clients to diversify and consolidate wealth management across various institutions with a single trusted advisor.
What is the difference between an external and internal asset manager?
An internal asset manager is employed by the bank where your assets are held and typically offers standardized investment services. An external asset manager operates independently, offering more personalized and often more flexible financial advice while your assets remain with a custodian bank.
