Friday, March 7, 2008

Private Banking Vs Privilege Banking

Private Banking is a term for banking, investment and other financial services provided by banks to private individuals with sizable assets. It is viewed as very exclusive, only catering for high net worth individuals with liquidity over $1 million. Some banks accepted private banking for those with lower liquidity at around $500,000.

These high net worth individuals are usually very successful businessmen, entrepreneurs, or inheritors of the family wealth. With a large fortune behind them, they engaged private bankers to assist them in managing the wealth, be it to create more wealth, preserve the wealth, or manage the fortune in preparation of wealth transmission to the next generation.

Private bankers provide a very personalized service include investment advice, discretionary portfolio management, lending, insurance, estate and trust planning, and wealth structuring. They will carry a wider range of products like offshore and hedge funds specially designed for this group of people.

The top 5 global banks in 2007, in term of assets under management, profitability, ratio of clients to relationship managers and services offered are UBS, Citigroup, HSBC, Credit Suisse and Merrill Lynch.

Privilege Banking is the mid-section between Retail Banking and Private Banking, basically targetted at the Mass Affluent with liquidity over $200,000. Some benefits they get includes:
* Having a personal Relationship Manager
* Dedicated Premier Banking Centres & Private Tellers
* Express channels at all branches for counter transactions
* Financial needs analysis and personal financial planning
* Investment and currency updates
* Private invitation to talks and seminars on leisure pursuits, etc

The range of product available for this group of people is near to those under private banking though the level of service will be slightly less personalised.

Don't know if I'll have the privilege to engage a Relationship Manager or Private Banker to manage my wealth one day... :)


Anonymous said...

Private bankers,relationship managers are just like most other financial professionals,which includes financial planners and advisors,fund managers,etc.

They work within the same safe parameters of asset allocation and guidelines,as laid down by the institutions whom they worked for.Like you and I,they have no sure-fire formula to earn big money.Caveat emptor.

The only sure thing is that you're still young and there are ample opportunites for you to make some money.

You can go daily to taste the cheese-cakes and coffee at one of the foreign banks,with only a 50k deposit,like what two my friends do often.

Privelege banking it sure is.Just watch your weight!

Anonymous said...

Private Bankers' job and status are neither glamourous or sophiscated. A Private Banking career is in the same league as a used car salesman or a property agent or an insurance agent. There's nothing mythical about the Private Banking job/

Wealth Journey said...

Previlege or Priority Banking is similar to retail banking (apart from the fact that it's an avenue for proven retail personal bankers to do a career progression). They do not construct a portfolio for you like an IFA. They are product peddlers.

Private banking is really a big leap and it is here that you will really be assigned a banker that will do things for you on the call. (But make sure it's related to their jobscope since I believe mutual respect is important. Don't ask them to buy movie tickets or walk your dog..) Here, they will construct a portfolio.. BUT as usual.. they will give you new products as and when the banks have new ones.

I know the unattainable is always the most desirable. But once you reached that level, you will not find anything special. Ultimately, you are still in control of your finance as there is always a conflict of interest between the customer and the finance professional.

But if you really wanna know which bank gives you a very HI-TOUCH environment.. It is UBS. I have relationship with DBS, Credit Suisse, Standchartered., UOB .. but recently have consolidated into only UBS and Credit Suisse as I want a simpler portfolio management.