Key Takeaways
- • Five major custodian banks—Northern Trust, Deutsche Bank, Lombard Odier, Standard Chartered, and RBC Wealth Management—are actively competing in Asia's external asset manager (EAM) custody market, with Singapore and Hong Kong as primary hubs.
- • Market entry barriers are shifting: HSBC has exited EAM services in Singapore and Hong Kong, reportedly due to inability to achieve sufficient scale, while new custodial competitors are emerging alongside traditional banking players.
- • Custodians charge EAMs a percentage of assets under management, scaled by portfolio size, though specific fee structures remain opaque and undisclosed across the industry due to client confidentiality.
- • Regulatory compliance costs present a material challenge for custodians in the region, contributing to market consolidation and selective service withdrawal by incumbent players.
- • WealthBriefingAsia's Fourth EAM Awards for 2025 will be announced in Singapore on 16 October, signaling industry maturation and institutional recognition of the growing EAM sector.
Summary
The custody services market for Asia's external asset managers is experiencing significant structural change, with established banking custodians facing competitive pressures from both market consolidation and emerging service providers. WealthBriefingAsia conducted interviews with five major custodians—Northern Trust, Deutsche Bank, Lombard Odier, Standard Chartered, and RBC Wealth Management—to assess their roles in servicing EAMs across Singapore and the broader Asia-Pacific region.
Custodians provide critical infrastructure to EAMs, handling compliance, reporting, asset servicing (including dividend and interest collection), and securities settlement and clearing. However, the traditional banking monopoly on this market is eroding. HSBC's withdrawal from EAM services in Singapore and Hong Kong exemplifies this trend, with the bank's exit attributed to an inability to achieve sufficient market mass to remain competitive. The publication notes a high number of registered EAMs operating in Singapore and Hong Kong, yet lacks comprehensive data on custodial fee structures—a gap that reflects the industry's general opacity regarding pricing.
Custodian banks typically charge EAMs on a percentage-of-assets basis, with rates varying according to portfolio size, though specific fee schedules are not publicly disclosed due to client confidentiality agreements. Compliance costs represent a material headwind for custodians, potentially contributing to service withdrawals and market restructuring. New custodial players are entering the market and challenging established providers, indicating a shift toward more competitive service models and potentially improved terms for EAMs.
WealthBriefingAsia's ongoing coverage of the EAM sector includes the Fourth EAM Awards for 2025, with public announcement scheduled for 16 October in Singapore, reflecting growing institutional focus on the region's independent asset management ecosystem.
Custodians provide critical infrastructure to EAMs, handling compliance, reporting, asset servicing (including dividend and interest collection), and securities settlement and clearing. However, the traditional banking monopoly on this market is eroding. HSBC's withdrawal from EAM services in Singapore and Hong Kong exemplifies this trend, with the bank's exit attributed to an inability to achieve sufficient market mass to remain competitive. The publication notes a high number of registered EAMs operating in Singapore and Hong Kong, yet lacks comprehensive data on custodial fee structures—a gap that reflects the industry's general opacity regarding pricing.
Custodian banks typically charge EAMs on a percentage-of-assets basis, with rates varying according to portfolio size, though specific fee schedules are not publicly disclosed due to client confidentiality agreements. Compliance costs represent a material headwind for custodians, potentially contributing to service withdrawals and market restructuring. New custodial players are entering the market and challenging established providers, indicating a shift toward more competitive service models and potentially improved terms for EAMs.
WealthBriefingAsia's ongoing coverage of the EAM sector includes the Fourth EAM Awards for 2025, with public announcement scheduled for 16 October in Singapore, reflecting growing institutional focus on the region's independent asset management ecosystem.
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