We interview SingAlliance Pte co-founder Jolene Tan, and president of the Association of Independent Wealth Managers Singapore, about the rise of EAMs, their place in the wider financial space, and what the future holds.

Southeast Asia’s external asset management industry is expanding rapidly and is now a well-established sector, tapping into increasing demand for independent wealth guidance, a senior industry figure says.

This news service recently held its inaugural Asia EAM awards programme in Singapore, and the enthusiasm and scale of involvement is a bellwether of how vibrant this sector is. (We have been tracking and researching the EAM sector for some time. See a research report from 2017.)

“We are seeing more and more Asian EAMs being set up and the business model is getting more accepted,” Jolene Tan, TEP, managing partner and co-founder of SingAlliance, told WealthBriefingAsia in an interview at SingAlliance Pte’s offices in Singapore. The business was established in 2011.

The EAM model presents an alternative and unique option for clients in its level of independence and attention to the personal relationship built. EAMs have the flexibility and access to a universe of solutions without being restricted by a specific bank's product line, Tan said. From the client's perspective, they will value the transparency and alignment of interest of EAMs to trust us to act only in their best interests, she continued. 

Tan is deeply involved in the sector and is now president of the Association of Independent Wealth Managers (AIWM) Singapore, and a member of the Institute of Banking & Finance (IBF) Private Banking & Family Office industry workgroup. Before she founded SingAlliance, she was an RM at Julius Baer. She has also worked at OCBC and ABN AMRO. In addition, Tan is a member of the Institute of Banking & Finance (IBF) Private Banking & Family Office industry workgroup.

“There is a lot more awareness of the EAM model…there were only a handful of us 11 years ago,” Tan said.

A number of forces are propelling EAMs, such as transfers of wealth to the next generation and a younger cohort of HNW individuals, with a demand for more innovation.

Singapore is also ideally placed to capture such trends. 

“It is not surprising that Singapore is a shining star and attractive hub of wealth. There is a lot of wealth that is flowing into Singapore,” she said. 

“The Singapore government and Monetary Authority of Singapore have been supportive in areas such as encouraging family offices to locate in the jurisdiction, and the VCC regime has also shown positive results thus far,” she said, referring to the jurisdiction’s Variable Capital Company regime. (This was formed in 2020.) 

MAS is studying a second iteration of the VCC regime to promote its adoption further. With a growing interest in the alternative space, suggestions of improvements in VCC 2.0 include expanding the scope of asset classes to cover real estate or digital assets. 

“At the same time, it would be good if MAS looks into extending the current VCC grant beyond the January deadline next year,” Tan said. 

There has been a strong adoption of VCCs within various sub-classes – VC, hedge funds and private equity. And there could be re-domiciliation of funds to Singapore from other jurisdictions.
 

A diverse menu
The Asian EAM industry is diverse, with some operating as traditional discretionary asset managers across various asset classes, some concentrating on very specific alternatives like private equity, and others operating as a platform business model.

What can Singapore’s EAMs learn from those in other countries, such as in Switzerland? (Switzerland’s industry is going through major regulatory changes.) 

“It is meaningful for the [AIWM] association to engage in cross-border dialogues with the EAM industry in other countries to exchange ideas and best practices,” Tan said. “For example, zooming into Switzerland, we see the recent regulatory changes to the Swiss EAM industry. On the other hand, Singapore has regulated the industry from the start rather than relying on self-regulation bodies. In this regard, the Singapore EAM sector has been more progressive.”

“At the same time, there is a great deal we can learn from the Swiss EAMs to be more like wealth planners by taking a holistic view of the client's wealth. We have to look beyond managing their assets and delve into how we can empower them in their estate and legacy planning.” Tan continued. 

Tan said that the administrative, operational and regulatory load of setting up a new EAM can be “overwhelming at the start.” To handle this, she said, platforms are a way of leveraging the resources already in place so that advisors can focus on relationship management and growing their network. 

“Yet there are some aspects that a platform lacks compared to a boutique EAM. Platforms function in silo teams, whereas being part of an EAM allows you to tap into the company's brand identity and reputation. Collectively, it offers clients a sense of credibility and continuity in a brand and not simply an individual,” she said. 

EAMs and family offices
WealthBriefingAsia and Tan discussed the need to not confuse EAMs with single family offices. SFOs are primarily about structures for holding families together, providing governance, and a shared set of values and goals, rather than focusing only on wealth planning and investment. 

Some SFOs need help with investment and wealth planning, and EAMs can tap into this family office need by having this function delegated to EAMs, Tan said. 

“It is important to look at how single family offices and EAMs can work together. VCCs can only be run by permissible fund managers who hold the required licences in Singapore. A family office can outsource the management of the fund to us,” she said.

Asked what are the biggest attractions in working at an EAM, Tan said: “Our independence and size translate into less bureaucracy and the flexibility we have in the way we work. It allows us to listen intently to our clients and craft a truly bespoke solution for them. The satisfaction born out of crafting a solution that is uniquely for the client and one that can meet their needs is the biggest attraction of the EAM model.” 

WBA asked what Tan missed about working for a bank. 

“The economies of scale of a bank undoubtedly establish a framework and infrastructure that can render support in day-to-day business activities such as operations, IT and administration. It is quite the contrary from running an EAM as it demands attention to every aspect of our business. On the flip side, this also means that EAMs are nimble and can adapt quickly to whatever challenges arise,” she said. 

Tan was asked about how the sector is coping with forces such as inflation pressures and weak global growth.

“Globally, the volatile market environment has certainly weighed on our assets under management amid surrounding geopolitical and inflation risks. We can also feel the impact of inflation on the higher costs we need to absorb. The culmination of these factors challenges growth and, ultimately, creates pressure on consolidation,” she said. 

“The changes in the regulatory landscape have also posted increased regulatory and compliance demands that will require more resources to grasp and meet these obligations,” she continued.

“Hiring relationship managers has been a challenge for EAMs. RMs need to have an entrepreneurial mindset; to be able to source for solutions and deliver to meet clients' needs," Tan added.