GAM chief executive Alexander Friedman is to step down after four years at the firm with immediate effect.
Board member David Jacob has been appointed interim CEO, subject to regulatory approval, whilst a search for a new chief is conducted.
In a statement, the firm said both parties agreed the company's future "evolution" would be best delivered by new leadership.
It was reported in early August the chief executive was facing shareholder pressure to step down following a series of crises at the firm since he took over in 2014.
During his tenure, the group has overseen a profits warning caused by an unsuccessful acquisition, a faltering share price and, most recently, from the suspension of Tim Haywood.
Haywood was suspended following whistleblowing claims of issues relating to his risk management procedures and record keeping.
GAM subsequently liquidated the £8.5bn absolute return bond strategy on the back of high levels of redemption requests.
Since the start of the year, GAM's share price has plummeted 62% to CHF 6.1 amid the ongoing issues.
Friedman joined GAM from UBS Wealth Management, where he was global chief investment officer and managing director for three years from 2011.
Prior to this, he was chief financial officer of the Bill & Melinda Gates Foundation from 2007 to 2010 and a senior advisor to Lazard.
Jacob will remain on the board of directors but step down from his role on the audit and compensation committees.
Hugh Scott-Barrett, Chairman of GAM, commented: "The group is facing some important decisions as we seek to position the business for future growth.
"Alex and the board of directors jointly agreed that new leadership will better enable us to take the action necessary to support profitability and drive forward the group's strategy.
"David's expertise and experience will give those teams the leadership and support they need as we focus on delivering for our clients.
"Alex has ably led the business during a time of unprecedented challenges for the active asset management and hedge funds industry.
"Alex had the full support of the board in the decision to suspend a portfolio manager in July. During his tenure as CEO he has driven a significant programme of change that has made us a more modern, diversified and cost-effective business."
Jacob said: "GAM is a premier asset management company known for its talented portfolio managers.
"Despite the setback suffered by the business this year, we are fortunate to have a board with a wide and relevant range of experience as well as the strong management team that Alex assembled."