Hello @Sam_ECU
Looking to the error you are encountering, my first question would be how did you generate the code to use external mode feature? Did you press first Build, Deploy & Start button and then trying to connect from external mode menu? If this is the case, you have to know that the normal build does not contain all the External Mode over XCP Serial protocol communication stack that has to run on the board.
To run External Mode, after you configured the XCP Serial communication interface setting from Target hardware resources menu <- Hardware Implementation tab, you have to press the Monitor & Tune button from RUN ON HARDWARE menu in the Simulink model, as in the picture below:

When you press this button, all the XCP Serial communication interface sources will be added, compiled for your specific hardware and automatically downloaded on your 1062-EVK. Then, Simulink will automatically connect to the board and will display the logged signals in the Simulink scope in real-time.
Let me know if this works!
Regards!
Stefan.