The External Asset Manager: is your CLM ready for that sales channel?

Across Europe, the rise of the External Asset Manager is a trend that couples huge potential gains with added complexity for banks’ and wealth management firms’ Client Lifecycle Management (CLM).


Across Europe, the rise of the External Asset Manager (EAM) – otherwise known as Financial Intermediary Managers (FIMs) – is a trend that couples huge potential gains with added complexity for banks’ and wealth management firms’ Client Lifecycle Management (CLM).  

So how can firms maximise their appeal to this growing workforce? And what’s driving growth in this area? 

The context 

The first EAM companies were founded in Switzerland in the early ’80s and by 2018, Advent estimated ‘some 3,000 EAMs in Switzerland’ were ‘managing as much as CHF300 billion (US$302 billion) in private client assets.’ It’s a phenomenon fuelled by both sides. Experienced former bankers are attracted by the rewards and the independence of working for themselves, while the banks win too – by buying in the expertise and an established client base of HNWIs – a bridge to increased revenues and reduced costs.  

It’s a scenario in which banks can deliver more choices as to who manages their client’s money for the best return. Indeed, the EAM is hyper-agile and flexible – able to propose the best of breed solutions for their clients and offer a more strategic, independent viewpoint. For instance, they could pick up the structured products offering from a bank that is well-known for its expertise on it, and portfolio management with another bank. For all of these reasons, freelance banking is a growing sector, with an estimated 5 to 35% of Swiss banks’ revenue derived from this sales channel.  

Attracting EAMs requires the right tools 

In exchange for their expertise and agility, the EAM is seeking tools to reduce the administrative burden and enable automated fee calculation, digital onboarding, and event-driven reviews.  

Even aside from this trend, the wealth management landscape is growing more complex, with diversifying asset classes including cryptocurrency services being offered by even some of the most long-standing Swiss banks. Add to this, greater client expectations and more touchpoints and channels for communication, and Client Lifecycle Management is under mounting pressure to deliver across a multitude of channels.  

Many European firms, therefore, find themselves hampered by a technological infrastructure that’s no longer 100% fit for purpose. In any situation, the efficiency, engagement and productivity of the relationship manager and advisor are impacted by the technology at their disposal, yet in the case of the EAM, there’s an added risk for the bank: they can take their business where the infrastructure supports them. Dissatisfaction leads to attrition – and not just of a client’s wealth – but of a whole book. This too can become an accelerator of client turnover as clients go where the technology wholly supports choice and a personal, intuitive style of service. 

The Client Lifecycle Management challenges 

In the absence of an effective, integrated CLM solution, banks may have multiple, complex systems to navigate. This means, given access to their back-office, the EAM potentially has to be an expert in them all – from Core Banking Systems to CRM and Portfolio Management Systems.  Each bank’s internal policies will likely determine how much access they can have – from the right to change a client’s personal data to the facilitation of transactions or wire transfers beneath a certain limit. All of this is extremely cumbersome to set up from a systems perspective.  

Finding solutions for this new world 

So how can banks tap into the talent and network of EAMs without exposing themselves to added security or compliance risks, needing to navigate a complex IT set-up surrounding access rights or risking the loss of whole swathes of their book?  

The solution lies in providing a single platform with a portal that allows the EAM access and full view of the client without compromising the client’s data or journey.   

Such systems have the propensity to ensure EAMs become a natural extension of the bank, able to fully service their customers, feel in control and remain aligned to their client’s preferences and investment choices. As more of this technology is deployed, it’s likely to rank on any EAM’s wish list when seeking fertile new ground. Not least when you consider the alternative – a fragmented view of the client, obscured by multiple siloed systems and historical data, plus hours spent form filling, obtaining manual signatures, tracking progress and fulfilling compliance. 

CLM solutions built for modern-day wealth management 

Wealth Dynamix offer such a solution; our platform manages the complexity of the client lifecycle beneath its interface to offer an exceptional UX that’s accessible to front, middle and back-office team members, or a designated third-party intermediary.

Facilitating workflows, supporting a 360-degree view of the client and ensuring client preferences and data are utilised throughout the client journey end to end, this technology is a game-changer for internal and external wealth managers alike, giving them more time to focus on revenue-generating activity and greater insight to target their actions.

EAMs would also appreciate a solution with the ability to manage multiple custodians and move them from one custodian to another. On the other side, each custodian will keep EAMs if they provide them with a platform allowing them to perform operations as if they were an employee of the custodian. 

Cédric Neuville, Director of Pre-sales and Consulting Europe, commented, “We’re seeing more awareness from European banks in terms of the diversification of the wealth management environment and the need to adapt systems to give private bankers and EAMs the tools they need. Firms still relying on a patchwork of systems and manual processes will struggle to attract the top talent and stay competitive. It’s a trend to be mindful of when looking at upgrading your CRM or CLM.” 

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