Private Banks

HSBC Global Private Banking Closes IAM/EAM Desks in Hong Kong and Singapore

HSBC Global Private Banking has discontinued its independent/external asset manager (IAM/EAM) desks in Hong Kong and Singapore after reviewing the business's effectiveness.

This development was initially reported by Bloomberg.

HSBC has pledged to facilitate a smooth transition for the clients affected by this change and has reaffirmed its commitment to continue serving its single family office and multi-family office clients directly through its private banking services. The bank noted that it already handles the majority of these clients directly.

The IAM/EAM desks, which were launched in Singapore in 2020 and in Hong Kong in 2022, were designed to support the unique needs of ultra-high-net-worth (UHNW) clients. These clients typically employ IAMs/EAMs to manage their wealth and provide unbiased financial advice.

The role of EAM desks varies across private banks in Asia. For example, VP Bank considers it a core part of its business, while Deutsche Bank Private Bank exited this area in 2017. These desks generally offer brokerage, custody, and investment advisory services for accounts managed by EAMs. In these arrangements, private banks act as custodians of the client's assets and typically charge either a flat fee or a percentage based on the assets under management.

There has been criticism of many private banking intermediary desks, particularly those serving the multi-family office segment, as being outdated and susceptible to digital disruption. Critics have pointed out inefficiencies in statement aggregation and pricing models, prompting private banks to increasingly focus on firms managing $150 million or more in assets.