The growth of external asset management is one of the most significant wealth trends in Singapore, as high and ultra-high net worth individuals and families look for more customised solutions.

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According to new research from Bank of Singapore, external asset managers are gaining traction, driven by a new generation of clients who value autonomy, transparency, and tailored advice. More than half of the managers surveyed in late 2025/early 2026 said they were exploring new markets and forming strategic partnerships, with almost two-thirds ranking improving customer experience and engagement as their top priority.

One-third of respondents expected fixed income solutions to see the biggest growth in demand among clients, reflecting a more defensive stance as clients seek to lock in yields ahead of anticipated interest rate declines. Other asset classes expected to see growth in demand include alternatives and ETFs.

Challenges and Opportunities for External Managers

Lim Leong Guan, global head of financial intermediaries, family office, and wealth advisory at Bank of Singapore, says there is recognition of the twin challenges of helping clients shift their portfolios amid the geopolitical environment and fast-changing investment environment due to technology innovations and demographics, as well as the necessity to build scale and diversification in their businesses.

Unlike large financial institutions, external asset managers need not be driven by short-term revenue targets, which enables them to build stronger, longer, and more trusted relationships with clients and develop genuinely customised approaches to wealth management.

Who Uses External Asset Management?

The core users of external asset management services are high net worth and ultra-high net worth individuals and families who prioritise independence, transparency, and a deeper advisory relationship than they may get from traditional banks, explains Damian Hitchen, regional head of APAC and MENA at Saxo Bank.

“We are also seeing more institutional players—including insurance asset managers—turning to external portfolio management specialists to complement their internal capabilities, particularly as portfolios become more complex,” he adds.

Hitchen refers to a shift driven by second- and third-generation wealth holders, who are more digitally engaged and prefer advisers who can offer open architecture access and a personalised, tech‑enabled service.

Serving Smaller Clients Cost-Effectively

Multi-family offices and external asset managers that have their own funds can accommodate smaller clients far more cost-effectively than banks for relatively modest sums, suggests Simon Hopkins, managing partner at East West Private Wealth.

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“However, larger clients typically require more bespoke services, including corporate advisory, access to leverage , and trust and fiduciary services at a minimum,” he adds. “Some external asset managers offer full concierge services as well.”

At its broadest, the main users are clients who have wealth they wish to grow or protect and who want a service that is tailored specifically to them, rather than built around a standardised product.

Younger Professionals and Next-Generation Wealth Holders

That is the view of Stephen Davies, founder and CEO of Javelin Wealth Management, where one of the fastest-growing segments is young professionals who may not meet the minimum thresholds that private banks prioritise but are looking to build meaningful wealth over time.

“Wealth in Asia is increasingly passing to the next generation, and younger inheritors tend to ask harder questions about how their money is being managed and whose interests their adviser is actually serving,” he says. “That shift in mindset is expanding the pool of clients who seek out genuinely independent advice.”

Family Offices and Multi-Generational Wealth

Another important user group is family offices seeking professionalised management for substantial private wealth and complex multi-generational requirements, observes Nithi Genesan, country head – Singapore at Waystone.

“Rapid wealth generation has created a robust pipeline of high net worth and ultra-high net worth individuals requiring sophisticated financial oversight,” she says. “This is further bolstered by Singapore’s strategic positioning as a global family office hub , which has attracted significant international capital and a need for local expertise.”

Genesan suggests that family offices are increasingly choosing to outsource and delegate their investment decision-making to trusted external asset managers, and that rather than managing complex portfolios internally, these offices utilise external asset managers to act as their outsourced chief investment officers, providing a higher level of professionalised management and objective expertise.

“Furthermore, from a regulatory standpoint, they ensure high levels of transparency by generally disclosing all fees in strict accordance with applicable regulations,” she continues.

Drivers of Demand

According to Hopkins, demand for external asset management has been accelerated by disaffection with the private banking industry (which he says is seen as banal yet expensive), the desire of relationship managers to work in a more flexible setup with true open architecture, and a focus on the client rather than the bank’s targets.

“However, perhaps the biggest driver is the ability for the relationship manager to be better paid than in the banks, which are all typically burdened by very high cost-to-income ratios,” he adds.

Market Growth and Future Prospects

Custodian bank executives have described the growth of this segment in Singapore as ‘staggering,’ with strong prospects for further growth.

However, Polka Mishra, Javelin Wealth Management partner and managing director, reckons demand has probably not grown as much as might have been expected, noting that market penetration is estimated to be lower than in more mature markets.

“There are two reasons for this,” he says. “Firstly, Asian investors tend to be at a slightly earlier stage of their wealth management needs, and secondly, there is still a strong focus on brand rather than service.

The major banks carry a natural advantage because of the existing linkages between the banking services they provide to families and their companies, and many clients have historically preferred to keep those relationships together.”

Those linkages are now being questioned, though, with the result that more clients are starting to separate their banking relationship from their wealth management.

As second- and third-generation wealth holders rise to prominence and transactional approaches give way to more fiduciary models, high net worth and ultra-high net worth clients' desire for conflict-free advice and independence is keeping the sector growing.

“With external asset manager-managed assets representing just 5% of the market in Singapore, there is significant room for the independent wealth management model to grow,” says Mishra.