External Asset Manager (EAM)

An external asset manager (EAM) is a wealth manager which works independently from banks. Wealth managers may be individuals or companies.

The terms external asset manager and independent asset manager are often used synonymously, although not all external asset managers are completely independent in the strict sense of the word.

Services offered are numerous and vary between service providers, depending on their level of specialization. Tax consultation, cash management, trading, estate planning and inheritance management are among the services offered by EAMs.

Some external wealth managers focus on specific areas or investments. Examples of specialized areas of practice include: Real estate, commodities, dividends, derivatives or structured products, fixed-term deposits, specific categories of stocks, private equity and hedge funds.

External wealth managers may also focus on specific types of clients. Generally, a difference is made between services provided to private clients and those provided to institutional clients, but wealth managers may service both types of clients. Other possible focus areas include clients in specific sectors, a specific type of client – small and medium-sized businesses or startups, for example – or clients from a specific country or region.

External asset managers open accounts at third-party banks and custodian banks on behalf of their clients. Assets are held by banks. External asset managers are typically granted a power of attorney over accounts by clients to facilitate asset management.

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