Sandro Steiner of OLZ Wealth Management explains how and why the external asset management (EAM) industry has evolved in Switzerland, and looks at its growth potential and appeal in Asia.

Date: Mar 2012

Tags: EAM, Independent, Trust, Value proposition

• The evolution of the EAM model in Switzerland has been driven by private bankers who didn’t want to continue to push products on behalf of the banks they were working for
• The EAM model is a triangular relationship – with the bank custodising the assets, the EAM overlooking the services as a gatekeeper, and the client holding the account in their name
• Studies show that clients are now all looking for the same thing – for confidentiality, for individual support and for tailor-made structures
• European investors are looking for geo-political diversification, so view Asia as one of the regions to spread their assets into

When looking at the evolution of the EAM model in Switzerland, Sandro Steiner said in an interview that this has been driven by private bankers who didn’t want to continue to push products on behalf of the banks they were working for.

Instead, they wanted to be on the same side of the table as their clients, to avoid any conflicts of interest, he explained.

So they set up their own boutiques to look after their clients’ interests and other aspects of their wealth and portfolio.

Clients also like the transparency and confidentiality they can therefore feel in their trusted bankers, said Steiner.

The EAM model

He explained that the EAM model works in the following way: clients hold the account in their name with one or several banks, with the asset managers having a limited power of attorney to manage the financial matters of the client. The asset manager cannot normally make any payments outside of the client’s account.

It is a triangular relationship, he explained, with the bank custodising the assets, the EAM overlooking the services as a gatekeeper, and the client holding the account in their name.

Asia’s EAM growth potential

When looking at the various family office and other studies recently published, Steiner said that it seems that clients are all looking for the same thing – for confidentiality, for individual support and for tailor-made structures.

This is a big plus for EAMs and family offices, he said, given that this enables clients to combine the views of multiple service providers and different angles, rather than just offer an in-house view.

Growth in European assets in Singapore

According to Steiner, there are various reasons why a European client wants to book their assets in Singapore.

For example, if they believe in the Asian growth story, they would rather use an asset manager on the ground who can meet and network with the relevant people directly.

Also, European investors are looking for geo-political diversification, so view Asia as one of the regions to spread their assets into.