Program benefits are designed to make customers’ lives easier — both in and out of the financial institution — and some of the best banks include everything from managing customer accounts to creating individualized, fantasy retreats for them.
What Is Private Banking?
Private banking gives clients the opportunity to work with dedicated private banker partners and specialists to provide them with custom banking strategies and solutions. Private banking clients receive individualized advice to help them meet their financial needs and goals, while getting access to a number of services including personalized credit strategies and solutions, deposit and cash management services, and competitive rates. Many major bank chains offer private banking, including Wells Fargo and PNC.
The VIP treatment is usually given to people with investable assets of at least $5 million, though thresholds vary by bank. For example, UBS’s minimum is $2 million, but Merrill Lynch’s minimum is $10 million.
Private Banking Services
If you meet the wealth requirements to become a private banking client, you can reap the benefits that come along with it. Here are some of the private banking services offered to VIP clients.
1. Dedicated Account Manager
HNWIs usually have their money spread out through various accounts handled by a single account manager — also called a relationship manager — who oversees their financial assets and provides them with comprehensive banking services. This personal banker might also coordinate with a team of financial planning professionals, including an investment analyst, wealth management specialist, portfolio manager, tax attorney, trust and estate advisor, insurance specialist or others.
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2. Concierge Service
A private bank’s concierge service typically goes beyond providing customers with financial assistance. The concierge is there to make your life easier and add to your overall experience with the financial institution.
A concierge is used to dealing with HNWIs and their needs. Concierge services vary by bank and can include helping with event planning and philanthropic endeavors, arranging wealth management seminars for heirs, or even renting a yacht or planning a vacation for a client.
3. Specialty Asset Management
Often referred to as “nonfinancial” or “real” assets, VIP services can go far beyond what you might expect. For instance, Bank of America Private Bank (formerly U.S. Trust) can manage oil, gas and mineral properties; real estate; and private business partnerships for its clients.
Wells Fargo Private Banking can manage property reinvestment and rental income for customers, for example. In addition, it can assist clients with negotiating contracts and leases; conducting inspections; and dealing with legal, accounting and tax professionals.
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4. Premier Travel
It’s always nice to have someone take care of the details when you travel for work or pleasure, and many VIP private banks offer concierge travel services. While you’re diving at Australia’s Great Barrier Reef, exploring ancient caves in Spain, hitting the slopes in Aspen or preparing for your business meeting in London, your travel specialist can make sure you have VIP access to everything you need as a traveler — financial and otherwise.
The Chase Private Client program, for example, gives customers free debit card and ATM transactions abroad, free emergency card services, special credit options, 24/7 VIP assistance and special access to local arts and culture institutions.
5. Mortgage Perks
If you have a high net worth and purchase and hold a number of real estate assets, then your VIP banking services might include residential and commercial mortgage financing options. Private bank clients typically receive discounts on closing costs, reduced interest rates, senior underwriting support, direct access to customer service specialists and priority loan processing.
Benefits and Challenges of Private Banking
The main benefits of private banking are all the VIP services you get access to, but there are some cons to private banking. These include:
- Fees: Some private banking providers charge a monthly fee to cover the customized services they provide. Be sure you are aware of these fees before signing on as a client, or opt for a bank that doesn’t charge fees.
- Trusting someone else with your wealth: When you allow someone else to manage your money, you are trusting that they will make decisions with your best financial interests in mind. Make sure you choose someone who is trustworthy.
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Gabrielle Olya contributed to the reporting for this article.