Earlier this month, Standard Chartered Private Bank launched its external asset manager (EAM) strategy globally, in response to the growing demand by U/HNW clients for independent financial advice and taking advantage of the open architecture offered by EAMs — otherwise known as independent asset managers (IAMs).
The initiative is now live in Singapore, Hong Kong, Dubai and London and Standard Chartered Private Bank has EAM clients in all these centres, apart from London.
“The EAM segment was not our priority in the past few years, because we had a series of remediation exercises in the business — and last year we were distracted by COVID-19,” Cedric Lizin told Asian Private Banker. “But we are implementing some growth initiatives this year, and developing the EAM segment is one of these initiatives.”
The regional head of ASEAN & South Asia and global head of Global South Asia Community (GSAC) for private banking at Standard Chartered continued: “We have put in place the necessary internal control frameworks and processes and will finetune these to better serve EAM clients. We already have a number of RMs onboarding EAMs as we speak, and the early signs are encouraging.”
More hires on the way
To expand its market share as an EAM custodian bank, Lizin said Standard Chartered’s main route for client acquisition will be through hiring experienced RMs in this segment.
“We are talking to some external RM candidates focusing on EAMs, who are most typically either working on the EAM desks of peer private banks or private bankers who moved to an EAM but would like to return to private banking. These candidates would bring with them the knowledge of what EAMs need from a private bank. The discussions with these potential hires are pretty advanced for some.”
He added that the approach is focused on the quality of the RM candidates, instead of the number. “We are hiring RMs anyway so now it is just that some of the new hires will be RMs covering EAM clients.”
Apart from the EAM desk, any other RM can cover EAMs if they wish to do so, since some RMs are already connected to certain EAMs. “Standard Chartered welcomes existing RMs to bring in and develop new EAM connections. Or RMs could refer EAM connections to the EAM desk. “We take a flexible approach on this,” explained Lizin.
To provide additional support for EAMs’ processing and reporting needs, the bank is establishing a central pool of client service managers. “This will ensure quality service to EAMs while saving time for RMs to conduct client-facing tasks,” he noted.
This pool of client service managers will cover all EAMs, regardless whether they are working with the EAM desk or with individual RMs. Lizin pointed out that the new team of client service managers is a redeployment of existing manpower. Last year, the bank implemented a number of automation initiatives which freed up the capacity of a number of teams, including client service managers. “Basically, we have now decided to use that free capacity to service our EAM clients.”
Standard Chartered’s decision to launch a global EAM strategy lands itself in a competitive landscape. Many of its peers have positioned themselves in the region with dedicated EAM/IAM desks.
In March 2020, EFG unveiled an IAM-dedicated team in Hong Kong helmed by two ex-UBS specialists while HSBC opened an IAM desk in Singapore in December 2020.
In addition, Credit Suisse and Julius Baer both have considerable market share among Asian intermediaries and are stepping up their digital platform to service EAMs. For its part, VP Bank has over half of its AUM contributed by its intermediaries business, both in Singapore and globally.
Lizin believes that Standard Chartered has an edge in structured products, FX, credit and sustainable investments and that its existing strengths in specific asset classes will attract EAMs to open accounts. “Because EAMs usually have a number of private banking relationships, I would expect EAMs to open accounts with Standard Chartered so that their clients can access these areas,” he said.
“In addition, we will be enhancing certain features of our existing mobile banking app to facilitate EAMs’ use,” noted Lizin. “For example, we are developing the capability of providing a single login for EAMs to access all their clients’ accounts so that they don’t have to log in separately for different clients.”
He added that there will be a series of enhancements to cater to the specific needs of EAMs, and as it welcomes more EAM clients on board, the bank is open to learning more about the segment and providing more targeted services.