Northern Trust, Deutsche Bank, Lombard Odier, Standard Chartered and RBC Wealth Management talk to this publication about the work they do with external asset managers in Singapore and the surrounding region.

The role that banks provide as custodians to Asia’s external asset managers is crucial. The custody role covers everything from compliance through reporting, asset servicing – such as collecting dividends and interest payments – to settling and clearing securities. Custodians are in the business of keeping assets safe. 

Traditional banks’ hold on the custodial market is not set in stone and there are new players in the space. Compliance costs, for example, are a challenge. Some banks, such as HSBC, don’t provide EAM services in Singapore and Hong Kong any longer, possibly due to a failure to achieve sufficient mass in the market to gain an edge. (See this interview with Hg Wealth Management to discover its views about onboarding times.) There appears to be a lack of accessible data on what banks charge EAMs to provide custody and other services. In broad terms, banks charge a percentage of the value of the assets the EAM manages for a client, with the amount varying depending on the size of a portfolio, as far as this news service understands.

This publication is delving into the EAM space to discover what makes it tick. It spoke to several banks that provide custody services. Here are five of them: Lombard Odier, Standard Chartered, Deutsche Bank, RBC Wealth Management and Northern Trust (more interviews with other banks and institutions are forthcoming.) 

Nominations are open for the Fourth WealthBriefingAsia EAM Awards, 2025, with the public announcement in Singapore, on 16 October.

The banks do not disclose the names of their EAM clients, or their specific fees.

Staggering
“There is a high number of EAMs registered and open for business in Singapore and Hong Kong. The growth has been staggering, which clearly shows that there is demand for their services and excellent prospects for further growth,” Vic Malik, global head for EAM at Standard Chartered, said. 

Laurent Pellet, global head of EAMs at Lombard Odier, pointed out that the Swiss private banking group has been serving such intermediary businesses for a long time and brings scale to the job. 

“The business line dedicated to EAMs was created nearly 40 years ago. As of today, we have 75 professionals dedicated to serving EAMs. They are based in Switzerland, Asia, Europe and Middle East. This business line is strategic and significant for our group,” he said. 

Pellet said his firm provides custody and transactions as standard services to EAMs. "They’re supported by the bank’s technology platform (portfolio management system G2/e-banking MyLO). In addition, we provide EAMs with added value services such as access to Lombard Odier investment expertise, wealth and tax planning, family office expertise, and more."

At RBC Wealth Management Asia, its private banking head, Kamran Azim, said the organisation is continuing to seek EAM opportunities. Azim is also deputy CEO, RBC Singapore Branch.

"The EAM business complements our growth strategy in Asia of scaling client assets and strategic recruitment by growing our team of relationship managers. We recognise the increasing significance of EAMs and we are actively looking for opportunities to collaborate where we can add value," Azim said. 

EAMs now have a piece of a large pie. As the Monetary Authority of Singapore put it in its 2023 asset management survey, “Singapore serves [as] a key gateway for global asset managers and investors to tap the region’s growth opportunities, with 77 per cent of AuM sourced from outside Singapore, and 89 per cent of total AuM invested outside the country.” Total AuM, the MAS said, stood at S$5.4 trillion ($4.01 trillion) in Singapore in 2023. Discretionary assets accounted for more than half of that total figure. Not all that money will be held by EAMs, of course, but the figure suggests what a large field this is now. The number of licensed and registered fund management companies in Singapore increased from 1,194 as at December 2022 to 1,250 as at December 2023.

Growth has been significant, but it brings issues.

Yen Leng Ong, country executive, Southeast Asia at Northern Trust, says the EAM sector, and the firms that serve it, have several challenges. Regulatory issues are part of this, she said. 

“Proliferation of asset types, the collision and convergence of traditional and digital worlds, a global spotlight on sustainable investing and the corresponding increase in regulatory oversight – all paint a stark picture of the current landscape in Asia. External asset managers face the challenge of complying with multiple regulations and adapting to market changes, which require them to provide detailed reports, be transparent, disclose information and manage risk,” Ong said. 

“In addition, data and cybersecurity continue to be pressing concerns for managers, as does operational resiliency. As regulations and market infrastructure continue to develop globally, such as the move to T+1, it will be crucial that asset managers evolve their processes. This is especially true in Singapore given the time zone differences where an increase in operational support coverage is required,” Ong continued. (Markets are shortening the settlement cycle from settling two days after the execution date, to just one day after execution as a T+1 settlement cycle.)

Lombard Odier’s Pellet said that anti-money laundering controls, know-your client and data security are equally important concerns. 

Singapore has the benefit of a single regulatory framework, Pellet said. “Both EAMs and banks have the same regulator, MAS, hence the same requirements. We select the EAMs we work with in order to be aligned with the type of clients and the jurisdictions we cover. The time of `one size fits all’ is over. Today we need to define, know and monitor the markets we operate with,” Pellet said.

How EAMs fit in
At Deutsche Bank, the lender said working with EAMs is bound up with how it looks after ultra-high net worth clients more generally. 

“In Asia, Deutsche Bank has served the EAM market for over 10 years. In 2025, in line with the bank’s longstanding dedicated EAM business in Germany, the bank started to centralise all EAM business with dedicated EAM specialists in other locations. As of March, this year, this approach has been implemented across our Hong Kong, Singapore and Dubai locations; other locations will follow suit in due course,” Hugo van Kattendijke, head of external asset managers, emerging markets, Deutsche Bank Private Bank, said.

"A typical EAM partner,” he said, is “top-decile” in its chosen markets, advises its clients on a broad spectrum of investment and business needs, and operates across multiple regions and legal entities. 

(The names of specific EAM clients were not disclosed by the banks for confidentiality reasons.)

Models and services 
Standard Chartered’s Malik said it has two booking centres in Hong Kong and Singapore for the Asia market and it works with the “top 50” EAMs in Asia, particularly focusing on Singapore and Hong Kong.

At Northern Trust, Ong said, services to EAMs include fund administration, global custody, investment operations outsourcing and data solutions. 

“An emphasis on straight-through processing and high-automation processing is the basic expectation for large institutional investors. The key driver for demanding reliable and quality data is the ability for clients to make sound investment decisions through predictive behaviour decision-making modelling,” she said. The US firm, Ong continued, also partners with data science providers including Essentia and Venn by Two Sigma to support client investment teams. In addition, Northern Trust uses its Front Office Solutions capability, which serves the data and operations needs of sophisticated institutional investors with complex portfolios and large exposure to alternative assets.

VCCs
The banks commented on the impact that the rise of VCCs (Variable Capital Companies) has been having on what EAMs do and need. (These structures allow qualifying funds to be exempt from taxes on certain types of income, including capital gains and dividends.)

“VCC is a fund structure option for managers and investors that has attracted numerous family offices and global/foreign asset managers to launch funds in Asia,” Northern Trust’s Ong said. “Singapore VCCs benefit from tax incentives and tax exemptions on certain investment incomes from local market authorities, while also providing access to double tax treaties with 100+ countries. The VCC structure aligns well with international practices, thus the global investors find it comfortable in accepting the fund structure.”

At Deutsche Bank, van Kattendijke said VCCs are now “highly regarded as investment pooling vehicles by multi-family offices across Asia and beyond.” He is interested to see whether VCC structures can develop further and appeal to international institutional and wholesale profiles akin to Luxembourg fund structures.  

Lombard Odier’s Pellet elaborated on what VCCs have achieved.

“VCCs have seen a rapid increase in popularity among EAMs and asset managers in Singapore, mainly due to their flexibility and tax exemptions, resulting in efficient fund management operations. The use of VCCs suits EAMs well because a VCC fund can only be managed by a MAS-licensed entity, therefore even single-family offices will need to work with an EAM to set up and run the structure. 

“As many Singapore-based EAMs look to transition towards a more `European’ asset management model (more discretionary oriented), it is useful for them to have an efficient structure to package their discretionary mandates and build a performance track record,” he continued. 

Pellet sees two main models adopting the VCC structure:

First, the use of VCC as a structure to hold assets for individuals or families. “This applies to UHNW families given the relatively high minimum costs [required] to set up a VCC master fund. Families can then segregate assets into different sub-funds. When the VCC is set up for a single family, typically the VCC will be onboarded as an account holder. In this case, the VCC is treated pretty much as a Singapore company. There can be limitations in what a VCC account can do. For example, some banks in Singapore are reluctant to offer credit to VCCs since the structure is still relatively new.

“Sometimes VCCs are set up for multiple investors unrelated to each other. In this case it can be challenging to onboard the VCC as an account holder, since many banks (such as Lombard Odier), require KYC checks on all investors, which is impractical,” he said. 

Secondly, Pellet said, there is the use of VCC as a “traditional fund to which investors can subscribe.”
“In this case, the VCC executes trades with a prime broker and, vis-à-vis the private bank, it is considered as a standard third-party fund (a fund not on our open architecture list). The fund team will assess the marketing material of the fund to ensure they can support operationally. Once approved and onboarded, clients with traditional accounts will simply subscribe to the VCC fund,” Pellet added.

Artificial intelligence
Where does AI fit into all this activity, given the amount of focus on technology for many bank custodians today? Northern Trust’s Ong said the firm is using machine learning and related solutions to digitise documents, reconcile accounts and detect anomalous, fraudulent transactions. 

“We also conduct extensive research and development on new technology, including generative AI, to explore its potential applications. Notably, for custody services, we are expanding our document digitisation capabilities across a range of operational processes, from private equity to alternatives and collateral management,” Ong added.

RBC Wealth Management's Azim said that getting technology right is a big part of ensuring that EAM businesses can thrive.

"Significant advancements in technology have enhanced efficiency, transparency, and execution speed across the client lifecycle, enabling clients to have more control and access services directly. Banks also benefit by offering cost-effective solutions. However, the increasing need for technology investments is raising the bar required for success," Azim said.