The case shines a light on Singapore's EAM industry, now a substantial field of business. A raft of banks and other players serve these institutions.

Deutsche Bank faces a lawsuit in Singapore from an external asset manager for allegedly nabbing a wealthy client.

Invest Partners Capital Group (IPCG), licensed in the Asian city-state, is locking legal horns with the German bank, saying that Deutsche broke an EAM agreement and its duty of care, according to legal papers on the case seen by WealthBriefingAsia.

The claim, lodged with Singapore’s High Court on 11 July, states that Deutsche Bank poached a client, Splendor Lights Holdings Limited ("SL"), represented by Amphol Delertwongse (aka “Lee”), while the bank acted as the EAM’s custodian. 

Deutsche Bank disagrees with the allegations reported and will vigorously defend against any claims filed, a source familiar with the matter told WealthBriefingAsia.

An IPCG spokesperson emailed the following statement to this publication: “EAMs are independent and professional advisors that deserve protection and respect in the course of their practice. Even smaller firms like IPCG should not face unfair treatment.

“We advocate for collaboration, not conflict, with banks. We initiated this legal action to protect the rightful interests of our RMs and our company, and to call on banks to meet their duty of care toward their partners. We sincerely urge our counterparts in the financial industry to respect the professional roles and collaborative models within the industry as a whole.

"Banks should act as custodians and execution roles – not compete unfairly with EAMs for clients or pricing advantage. When banks offer different pricing directly to our clients, it creates a conflict of interest, erodes trust in both parties, and disrupts the integrity of the industry.”

Deutsche Bank declined to comment.
The terms of IPCG’s EAM contract with Deutsche Bank, signed in September 2016, said the bank would only act as a custodian of client assets and carry out trades, while IPCG provided wealth management and advice, according to the EAM's legal document that WBA has seen.

Details
On 20 April 2021 to 7 November 2023, Lee executed a lasting power of attorney (LPOA) on behalf of SL to manage SL’s assets held with Deutsche. SL terminated the power of attorney on 7 November 2023. While the power was in force, IPCG received S$2.152 million ($1.67 million) of retrocession fees from Deutsche relating to SL's accounts; it was also paid S$1.67 million of performance fee payments from SL for its advisory and wealth management services held at Deutsche Bank. 

IPCG claims that SL ended this power of attorney because of Deutsche Bank’s “breach of the terms of the EAM Agreement and/or its contractual and/or its tortious duty owed to the Claimant.” 

Shift in accounts
According to the lawsuit document, IPCG advised SL in and around April 2023 to move some of its assets at Deutsche to other banks, as markets were roiled by the collapse of Credit Suisse and its subsequent emergency takeover by UBS at the time. Between June and November 2023, SL instructed Deutsche at least six times to move assets from Deutsche Bank to SL’s HSBC accounts. Poh Yung Shun, Sean (“Poh”) was the RM assigned to SL. 

On or around 16 October 2023, IPCG asked for, and received, a quotation from Deutsche – via Poh – for a three-month fixed coupon note (FCN) on Tesla with a 1 per cent upfront fee and a strike price of 79.23 per cent. Chen Yeong-Tarn (employed by the EAM in April 2021 as a senior director) conveyed this quotation to Lee; subsequently, Lee told Chen that Deutsche could offer a lower strike price of 76 per cent directly to Lee. “Chen checked with Poh who admitted to Chen that he had provided Lee with a direct FCN pricing with a 0.5 per cent upfront fee, lower than the initial quote of 1 per cent given to Chen. In providing a lower quote directly to Lee, Poh (as a representative of the Defendant) had deliberately undercut Chen’s offer,” the EAM’s lawsuit alleged.

“Poh, being aware of his misconduct, thereafter assured Chen that he would not provide any further quotations to SL directly,” the document said. “It was clear that the Defendant had provided a higher quote to the Claimant, knowing that the initial quote would be relayed to Lee. The Defendant had thereafter proceeded to undercut the initial quote in an attempt to damage the Claimant's relationship with Lee and to provide wealth advisory services directly to Lee,” it alleged. 

In another case, the document said that on or around 31 October 2023, when Lee asked for an “decumulator contract,” Chen contacted Poh and Poh quoted a 1 per cent spread with a strike price of 132.93 per cent. After Chen relayed this quotation to Lee, Lee informed Chen that the Defendant had provided him directly with a superior quotation for a strike price of 134.5 per cent. Lee threatened to terminate the LPOA should the Claimant fail to meet the Defendant's quotation,” it said.

About the same time, Lee also told Chen that Poh (as a representative of Deutsche Bank) had suggested to Lee that the EAM had been enjoying “substantial returns” on the trades executed on SL's behalf, and that the EAM had made a “lot of commissions from the products offered by the Defendant.” 

“Poh’s statements were seemingly to disparage the Claimant's professionalism and to create the impression that Chen was driven by his personal financial gains, and not SL's best interests, when making investment decisions on behalf of SL,” the document said. 

“Despite terminating the [power of attorney] in respect of its assets at the Defendant, SL continued to use the Claimant (through Chen) as its EAM in respect of its assets at HSBC until HSBC closed its EAM desk in 2024,” the document continued. 

Deutsche Bank shut its EAM desk in 2017 and transferred the role of servicing EAM clients to individual relationship managers.

Deutsche had, the lawsuit document said, from around March 2017, “transitioned to a decentralised operating model for its EAM functions, in which the bank's responsibility of serving EAMs (such as the Claimant) would be integrated into general private banking teams.”

The document added that to the “best of its information and belief,” in or around August 2024, Deutsche had reverted to a centralised structure.

Reports said the first case conference for the proceedings is due to take place on 18 August.

This news service has spoken to Deutsche Bank, and others, about the EAM industry. In Deutsche Bank’s case, it spelled out its approach to the EAM market here.