In the ever-evolving world of finance, managing assets efficiently is crucial for individuals and organizations alike. External Asset Management (EAM) has emerged as a vital component of financial strategy. This comprehensive guide will walk you through the intricacies of EAM, providing insights into what it is, how it works, and why it’s important.
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What is external asset management? and how does it work?
External Asset Management (EAM) is a service offered by independent asset managers, allowing clients to place their wealth in a bank of their choice or one recommended by the EAM. EAM manages asset allocation and investment portfolios, providing clients with advice on investment decisions, strategies, and fund management services. EAMs in Singapore can be licensed as Registered Fund Management Companies or Licensed Fund Management Companies, depending on the category. License requirements include assets available at least S$250 million, two directors with over five years of experience, and both professionals living in Singapore.
Understanding External Asset Management
With the help of EAM, a specialised financial service, a client’s assets are maximised and aligned with their financial objectives and risk tolerance.
EAM involves several key players:
- Asset Managers: The experts in charge of choosing investments for customers are known as asset managers. In order to maximise profits, they analyse market trends, choose appropriate assets, and manage portfolios.
- Financial Advisors: Financial consultants get to know their customers well enough to grasp their financial objectives and risk tolerance. To guarantee compatibility with the client’s objectives, they make investment strategy recommendations and work with asset managers.
- Wealth Managers: Wealth managers tackle EAM holistically. Along with managing assets, they also take care of more general financial issues including retirement planning, tax reduction, and estate preparation.
How External Asset Management Works
The EAM process typically begins with a thorough assessment of the client’s financial situation, goals, and risk tolerance. This information forms the foundation for creating a personalized investment strategy.
Based on the client’s profile, asset managers develop an investment strategy. This strategy outlines asset allocation, investment choices, and risk management approaches.
Asset managers actively manage the client’s portfolio. They make investment decisions, monitor performance, and rebalance the portfolio when necessary.
EAM is not a set-and-forget approach. Regular communication between clients and their EAM professionals ensures that the strategy remains aligned with evolving financial goals.
What are the benefits of using an EAM?
EAM software offers numerous benefits, including reliable asset operations, HSE compliance support, asset-based decision-making, real-time asset performance tracking, operational efficiency increase, asset reliability and uptime improvement, centralization of critical information, improved collaboration and communication, and in-depth cost analysis. It collects comprehensive data to understand historical performance and schedule maintenance work for optimal asset performance. EAM software also automates error-prone tasks, streamlining maintenance processes and enabling better business decisions. It helps companies see increased returns and improved productivity from their assets by collecting comprehensive data and leveraging it for better asset operations.
What are the different types of EAM software available?
IBM is a leading provider of Enterprise Resource Planning (EAM) software, offering a range of features including asset management, work order management, and preventive maintenance. These software solutions cater to businesses of all sizes and industries, including those in the automotive, aerospace, and healthcare sectors. Some of the most popular EAM software include Facilio, Upkeep, Redlist, Fractal, Maintenance Connection, IBM Maximo, ABB Lumada EAM, Accela, Aptean TabWare EAM, and Ashcom Maintizer. Each software offers unique features and benefits, making it an essential choice for businesses of all sizes and industries.
- Facilio: Facilio is a cloud-based EAM software that offers a range of features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
- UpKeep: UpKeep is a mobile-first EAM software that offers features such as work order management, preventive maintenance, asset management, and more. It is suitable for businesses of all sizes and industries.
- Redlist: Redlist is a cloud-based EAM software that offers features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
- Fractal: Fractal is an EAM software that offers features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
- Maintenance Connection: Maintenance Connection is an EAM software that offers features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
- IBM Maximo: IBM Maximo is an EAM software that offers features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
- ABB Lumada EAM: ABB Lumada EAM is an EAM software that offers features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
- Accela: Accela is an EAM software that offers features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
- Aptean TabWare EAM: Aptean TabWare EAM is an EAM software that offers features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
- Ashcom MaintiMizer: Ashcom MaintiMizer is an EAM software that offers features such as asset management, work order management, preventive maintenance, and more. It is suitable for businesses of all sizes and industries.
Key features of effective EAM
Enterprise Asset Management (EAM) systems typically include a range of features that help organizations manage their assets efficiently. Here are some key features that should be on your checklist when evaluating EAM systems:
- Asset Hierarchy:The cornerstone for asset criticality, life data, asset classifications, conditions, and locations is a strong asset hierarchy or directory. You may receive insights on cost, performance, and risk for assets, lines, regions, and plants as well as account for expenses at various levels. The top EAMs enable you to upload pictures and documents, import an existing hierarchy and essential asset information via a spreadsheet.
- Work Order Management: Maintenance engineers can effectively perform repair orders on mobile devices or in the office thanks to a good work management module, which also allows them to consume spare components and report work order status and progress in real-time. It enhances decision-making, productivity, and maintenance efficiency.
- Document and Knowledge Management: Modern EAMs provide a document and asset information storage function. They allow you to keep PDFs, photos, manuals, reports, spreadsheets, and notes in one place for easy access and better organization.
- Maintenance Planning & Scheduling: Effective EAM systems offer maintenance planning and scheduling capabilities to optimize maintenance activities. This helps ensure that maintenance tasks are performed at the right time to minimize downtime and maximize asset performance.
- Inventory Management: Inventory management features allow organizations to track spare parts, consumables, and other inventory items associated with assets. This helps optimize inventory levels, reduce costs, and ensure timely availability of required parts.
- Condition-Based Maintenance: EAM systems with condition-based maintenance capabilities enable organizations to monitor asset conditions in real-time using sensors or other data sources. This allows for proactive maintenance planning based on actual asset conditions rather than fixed schedules.
- Integration with Other Systems: Integration capabilities are crucial for effective EAM systems. They allow seamless data exchange with other systems such as ERP (Enterprise Resource Planning), CMMS (Computerized Maintenance Management System), IoT (Internet of Things) platforms, and more.
- Reporting and Analytics: Robust reporting and analytics features provide organizations with insights into asset performance, maintenance costs, compliance metrics, and other key performance indicators (KPIs). This helps drive data-driven decision-making and continuous improvement
How do I choose a good EAM?
Reliability is a crucial factor when selecting an External Asset Management (EAM) service. It ensures assets run reliably and efficiently, supports health, safety, and environmental compliance, enables asset-based decision-making, tracks real-time asset performance, increases operational efficiency, improves asset reliability and uptime, centralizes critical information, improves collaboration and communication, and provides in-depth cost analysis. EAM software helps companies see increased returns and improved productivity by collecting comprehensive data, scheduling maintenance work, and automating error-prone tasks.
- Reliability and Efficiency: Look for an EAM service that can keep your assets running reliably and efficiently. Health, Safety, and Environmental Compliance: Ensure that the EAM service supports health, safety, and environmental (HSE) compliance.
- Asset-Based Decision-Making: Consider an EAM service that enables asset-based decision-making at the right levels for your organization. Real-Time Asset Performance Tracking: Look for an EAM service that allows you to track real-time asset performance.
- Operational Efficiency: Choose an EAM service that increases operational efficiency. Asset Reliability and Uptime Improvement: Consider an EAM service that improves asset reliability and uptime.
- Centralized Critical Information: Look for an EAM service that centralizes critical information.
- Collaboration and Communication Improvement: Choose an EAM service that improves collaboration and communication.
- In-Depth Cost Analysis: Consider an EAM service that provides in-depth cost analysis.
What is Challenges external asset management?
Challenges faced by external asset managers include finding a suitable partner who is experienced and knowledgeable in the field, incurring extra costs due to a lack of efficiency and a clear understanding or vision of an organization’s long-term objectives or goals, and managing assets that are outside their area of expertise.
For people and organisations looking to make the most of their financial resources, external asset management is a potent instrument. It provides customisation, professional knowledge, diversity, and efficient risk management. You may confidently navigate the complicated world of finance by entrusting your valuables to EAM specialists.
Is External Asset Management suitable for individuals and businesses?
Yes, EAM can be tailored to the needs of both individuals and businesses, making it a versatile financial strategy.
What is the typical fee structure for EAM services?
EAM fees vary depending on the complexity of the portfolio and the services provided. This may include a combination of fixed fees and a percentage of assets under management.
Do I have control over my investments with EAM?
Yes, clients can collaborate with EAM professionals to define their investment preferences and risk tolerance.
How often should I review my EAM strategy?
It’s advisable to review your EAM strategy periodically, especially when your financial goals or circumstances change.
Is EAM only for high-net-worth individuals?
While EAM is often associated with high-net-worth individuals, it can benefit anyone looking for professional asset management services.