Can an external asset manager arrange financing like a Lombard loan?

Yes. External asset managers with established private banking relationships can arrange Lombard loans (portfolio-backed credit facilities) against the portfolios they manage. In many cases, the EAM's relationships with multiple banks give clients access to more competitive terms than they would obtain dealing with a single bank directly. Amberlake Partners arranges Lombard financing for clients across a range of European private banks, and this capability is central to our property financing offering for international buyers.

How do I choose between an EAM and a private bank for my wealth management?

The key questions are: Do you want a single, independent point of advisory accountability, or are you comfortable with the conflicts inherent in bank-employed advisors? Do you have assets at multiple banks that would benefit from consolidated oversight? Do you want genuine access to the full market for investments, or are you content with your bank's product range? Do you value fee transparency? If the answers lean toward independence, consolidation, open access, and transparency, the EAM model is typically better suited to your needs.

External Asset Manager vs Private Bank: Key Advantages for High-Net-Worth Investors

Q: What is an external asset manager (EAM)?

An external asset manager (EAM) — also called an independent asset manager or independent wealth manager — is a regulated investment adviser that manages client portfolios held in custody at third-party banks. Unlike a private bank, an EAM is not affiliated with any bank or product provider. The client's assets remain at the custodian bank of their choice; the EAM provides the advisory, portfolio management, and reporting layer independently. This structure separates the advisory function from the custody and execution function, creating stronger alignment of interests between the manager and the client.

Q: How do EAM fees compare to private bank fees?

External asset managers typically charge an annual management fee of 0.5–1% of assets under management, sometimes with a performance component. Private banks typically charge all-in fees (often called 'flat fees' or 'mandate fees') of 1–1.5% or more, which may bundle custody, advisory, and execution — but also embed the bank's margin on products and transactions in ways that are less transparent. Additionally, private banks often earn revenue by distributing their own or partner products, which creates conflicts of interest that do not exist in the EAM model. In practice, many clients pay significantly less in transparent fees with an EAM than they paid (in aggregate, including hidden costs) with a private bank.

Q: What does 'open architecture' mean in wealth management?

Open architecture means the ability to access investment products from any provider in the market, rather than being limited to products issued or distributed by your own institution. A truly open architecture manager selects the best fund, structured product, or investment solution available globally for each specific need — without being influenced by whether the product is proprietary or generates higher internal revenue. Private banks operate in varying degrees of openness; many have preferred product lists or internal funds that advisors are incentivised to recommend. Independent EAMs, by definition, have no proprietary products and therefore no conflict of interest in product selection.

Q: Is my money safe with an external asset manager?

Yes — because your assets are held in your own name at a custodian bank (not on the EAM's balance sheet), they are protected from any insolvency risk of the EAM itself. The EAM has a power of attorney to manage and trade within agreed parameters, but cannot withdraw or transfer your assets to third parties. This custody segregation is a structural safety feature of the EAM model that does not exist when assets are held directly by a private bank.

By Amberlake Partners — July 2024 — Updated January 2026

Wealth management — comparing external asset managers and private banks

Private banking has been the default model for high-net-worth wealth management for generations. The combination of a recognisable brand, a relationship manager, and a broad range of in-house services creates an impression of comprehensive, dedicated care. In practice, however, the structure of private banking creates conflicts of interest, opacity in fees, and limitations in investment access that many sophisticated investors find increasingly difficult to accept.

The external asset manager (EAM) model — where an independent, regulated adviser manages your portfolio held in custody at the bank of your choice — has grown substantially as an alternative, and in many European private banking centres, including Monaco, Geneva, and Zurich, it is now the preferred structure for the most discerning clients. This article explains what the model is, how it compares to private banking across nine key dimensions, and when each approach makes most sense.

What Is an External Asset Manager?

An external asset manager is a regulated investment adviser that manages client assets held in custody at a third-party bank. The key structural distinction from private banking is this: the advisory function and the custody function are held by different entities.

In the private bank model, the bank both holds your assets and advises on how to invest them. This creates an inherent tension: the bank earns revenue not just from advisory fees but from distributing its own products, routing transactions through its own execution desks, and managing assets in ways that serve its own commercial interests as well as yours.

In the EAM model, your assets sit at a custodian bank of your choice — you retain a direct relationship with the bank and your assets are held in your own name. The EAM holds a power of attorney to manage and trade within a defined mandate, but cannot transfer your assets to third parties or access them outside that mandate. The EAM's sole revenue comes from the management fee you pay them. There are no hidden product margins, no distribution incentives, no conflicts.

The Nine Key Advantages

1 Consolidated Oversight Across Multiple Banks

Many high-net-worth individuals hold assets at multiple institutions — a consequence of accumulating relationships over time, diversifying counterparty risk, or having different types of assets at different banks. Without a single oversight layer, these relationships produce fragmented reporting, inconsistent investment approaches, and no single view of the overall portfolio.

An EAM with power of attorney across multiple custodian accounts provides exactly that consolidated view. Regardless of which banks hold your assets, the EAM manages them as a single, coherent portfolio — with unified reporting, consistent risk management, and a single point of strategic decision-making.

2 A Single Point of Accountability

Private bank relationship managers change. Staff turnover in large institutions means that the person who knows your history, your preferences, your family situation, and your long-term objectives may be replaced with little notice. Each transition means rebuilding a relationship and re-explaining context that should be understood implicitly.

An EAM relationship is directly with the firm and the individuals who run it — not with an employee of a large institution who may be moved, promoted, or replaced. Amberlake Partners is a small, specialist firm: our clients work directly with our principals. The continuity this provides is not incidental; it is foundational to the quality of the advisory relationship.

3 Materially Lower Banking Fees

EAMs aggregate assets from multiple clients across their custodian bank relationships. This volume translates into negotiating leverage that individual clients rarely have on their own. Custodian banks compete for EAM mandates and offer preferential terms — lower custody fees, tighter execution spreads, and better access to institutional pricing — in exchange for the relationship.

In practice, the custody and execution costs borne by clients of well-established EAMs are frequently 30–50% lower than the equivalent costs they would pay dealing directly with the same bank as an individual client. Over a multi-million-euro portfolio, this difference compounds materially over time.

4 Full Fee Transparency

The EAM model charges a single, explicit management fee — typically 0.5–1.0% per annum on assets under management, sometimes with a performance component. There are no hidden revenues from product distribution, no margins embedded in structured products sourced from proprietary desks, and no transaction fees beyond those charged by the custodian bank (which are passed through transparently).

Private banks, by contrast, earn revenue in multiple ways simultaneously: the advisory fee, the execution spread, the distribution fee on funds and structured products, and sometimes a margin on credit facilities. The total cost of a private banking relationship is often significantly higher than the headline fee suggests, and much of it is invisible to the client.

5 Genuine Open Architecture

Open architecture — the ability to access the best investment products from any provider in the global market — sounds like a basic standard. In practice, most private banks operate a constrained version of it. They have preferred fund lists, proprietary structured products, and internal desks with commercial incentives to allocate client assets in particular directions.

A genuine EAM has no proprietary products. When Amberlake Partners selects a fund, a structured note, or an alternative investment for a client portfolio, the decision is driven entirely by suitability, risk-adjusted return, and cost — not by whether the product was manufactured internally or generates additional revenue for the firm. This is a structural, not merely a policy, distinction.

6 A Dedicated Wealth Relationship for the Long Term

The value of an advisory relationship compounds over time. A manager who has worked with you for five or ten years understands not just your portfolio but your life: your business interests, your family structure, your risk psychology, your goals for the next generation. This accumulated knowledge produces better advice — more contextual, more anticipatory, and less prone to generic recommendations.

This depth of relationship is more achievable in an EAM structure — where you are one of a carefully managed number of clients — than in a private bank, where relationship managers handle large books of clients across a range of situations. The personal relationship is not incidental to the EAM model; it is its core.

7 A More Attractive Investment Universe

EAMs with strong market relationships access investment opportunities that are frequently unavailable to individual private banking clients. These include primary allocations in structured products at issuance (rather than secondary market), direct participation in private debt and equity transactions, club deals in real estate, and access to boutique fund managers with high minimum thresholds that aggregate through the EAM's platform.

Amberlake Partners has direct relationships with structured product issuers across Europe, which allows us to design bespoke capital-protected or return-enhanced solutions for specific client needs — rather than offering off-the-shelf products from a bank's shelf.

8 Comprehensive Financing Solutions

Portfolio-backed financing — Lombard loans — is one of the most powerful tools in the EAM's toolkit, and it is one area where the EAM model can deliver materially better outcomes than a single bank relationship.

An EAM with relationships across multiple private banks can source Lombard financing from whichever institution offers the most competitive terms for a given portfolio and purpose — rather than being limited to what a single bank is willing to lend. For clients using portfolio-backed financing to acquire European property, this access to multiple lenders is particularly valuable. Amberlake Partners has structured Lombard facilities for clients across the French Riviera, Monaco, Spain, and Italy, often at terms unavailable through a direct single-bank relationship. For a detailed explanation of how portfolio-backed financing works, see our guide to financing European property purchases without full cash.

Beyond Lombard loans, Amberlake Partners can facilitate mortgage applications, yacht and aircraft financing, and art-backed lending through its network — providing a genuinely comprehensive financing capability alongside the investment management mandate.

9 Investment Philosophy Focused on Capital Preservation

For high-net-worth individuals whose priority is preserving and sustainably growing wealth across generations — rather than maximising short-term returns at higher risk — the EAM model's independence is directly aligned with a capital preservation philosophy. Without the commercial pressure to sell high-margin products or generate transaction revenue, the EAM can recommend the most conservative structure appropriate to each client's situation.

Amberlake Partners employs a capital preservation-first approach: protecting the downside is the primary objective, and growth is pursued within that constraint. This is expressed through the use of capital-protected structured products, absolute return strategies, well-diversified multi-asset portfolios, and careful liquidity management. It is an approach that suits investors for whom losing capital is genuinely unacceptable, rather than merely inconvenient.

EAM vs Private Bank: A Side-by-Side Comparison

Feature	External Asset Manager	Private Bank
Fee transparency	✓ Single explicit fee	Partial — multiple revenue streams
Product independence	✓ No proprietary products	Constrained — preferred lists, internal products
Multi-bank consolidation	✓ Core capability	No — single institution view only
Relationship continuity	✓ Principal-level relationship	Variable — staff turnover risk
Asset safety	✓ Assets held at custodian, not on EAM balance sheet	Assets held by bank — counterparty exposure
Lombard/financing access	✓ Multi-bank sourcing	Single bank terms only
Bespoke structured products	✓ Direct issuer relationships	Shelf products — limited customisation
Regulatory oversight	✓ Regulated independently	✓ Regulated
Brand recognition	Lower profile	✓ Established institutional names

When Does the Private Bank Model Still Make Sense?

Intellectual honesty requires acknowledging that the private bank is not always the inferior choice. There are circumstances where its structure is genuinely advantageous:

Credit facilities tightly integrated with custody: For clients whose primary need is a large Lombard or mortgage facility, keeping assets at the lending bank simplifies the credit structure and may yield better terms — though an EAM can often match or improve on this through multi-bank relationships.
Complex trust and estate structures: Large private banks have dedicated trust, fiduciary, and estate planning departments that smaller EAMs may not replicate in-house. For clients with significant structuring needs, the private bank's integrated service can be valuable — though the EAM can co-ordinate external specialists to fill this gap.
Brand comfort: For some clients, the psychological reassurance of holding assets at an institution with a 200-year heritage and a large balance sheet is valuable in itself. This is a legitimate preference.

The most sophisticated solution for many HNWIs is not a binary choice but a combination: an EAM providing the advisory and oversight layer, with assets held at one or more custodian private banks that are selected for their institutional quality, execution capability, and financing terms.

Amberlake Partners: The EAM Model in Practice

Amberlake Partners is based in Monaco and regulated by the CCAF (Commission for the Control of Financial Activities, Monaco). We are also registered with the US Securities and Exchange Commission — the only SEC-registered investment adviser based in Monaco and the South of France — which allows us to serve US persons in a FATCA-compliant structure.

Our clients include individuals and families relocating to Monaco, internationally mobile investors managing wealth across multiple jurisdictions, and US persons seeking European investment management and property financing solutions. We work with a small number of clients — not a mass-market book — which allows us to maintain the depth of relationship and quality of service that defines the EAM model at its best.

If you are considering a move to Monaco and want to understand how to structure your financial affairs on arrival, our Monaco residency guide and our guide for UK residents relocating to Monaco provide relevant context. If you are evaluating a Monaco property acquisition and want to understand your financing options, our guide to portfolio-backed property financing explains the Lombard loan structure in detail.

Frequently Asked Questions

What is an external asset manager (EAM)?

An EAM is an independent, regulated investment adviser that manages client portfolios held in custody at third-party banks. Assets remain in the client's name at the custodian bank; the EAM provides advisory, portfolio management, and reporting independently — without any affiliation to a bank or product provider.

How do EAM fees compare to private bank fees?

EAMs typically charge 0.5–1.0% per annum on AUM, transparently. Private banks embed additional revenue in product margins, execution spreads, and distribution fees that are often invisible to clients. The total cost of a private banking relationship frequently exceeds the headline fee by a significant margin. EAM clients typically pay less in aggregate, with full visibility of what they are paying and why.

What does 'open architecture' mean in wealth management?

Open architecture means genuine access to investment products from any provider in the global market, selected purely on merit — not constrained by internal product lists, proprietary distribution, or commercial incentives. A true EAM has no proprietary products and therefore no conflict of interest in product selection.

Can an external asset manager arrange a Lombard loan?

Yes. EAMs with multi-bank relationships can source Lombard financing from multiple lenders, often delivering better terms than a client would obtain from a single bank. Amberlake Partners arranges portfolio-backed credit facilities for clients making European property acquisitions and for broader liquidity management purposes.

Is my money safe with an external asset manager?

Yes — your assets are held in your own name at the custodian bank, not on the EAM's balance sheet. The EAM cannot withdraw or transfer your assets outside the mandate. This custody segregation protects you from EAM insolvency risk, which does not exist in the same way when assets are held directly at a private bank.

How do I choose between an EAM and a private bank?

Consider: Do you want a single, independent advisory point of accountability? Do you have assets at multiple banks that need consolidated oversight? Do you value complete fee transparency? Do you want unrestricted access to global investment products? If the answers are yes, the EAM model is typically the better fit — either as a replacement for, or alongside, your existing private banking relationships.

Conclusion

The external asset manager model exists because the private bank model, for all its institutional heritage, has structural limitations that sophisticated investors find increasingly costly. Fee opacity, product conflicts, fragmented oversight, staff turnover, and constrained investment access are not incidental flaws — they are inherent features of the bank-advisory integration.

The EAM model resolves these limitations by separating the advisory function from the custody and banking function, aligning incentives clearly, and providing the depth of relationship and independence of investment access that high-net-worth investors require and deserve.

Amberlake Partners has built our practice on these principles. If you are evaluating your wealth management arrangements — whether as a Monaco resident, a relocating HNWI, or an international investor seeking European market access — we welcome a confidential conversation.

Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice. Please consult with professional advisors for personalised guidance.