Finance

What are the exclusive benefits to private banking?

There is a lot of benefits to investing in certain investment options such as banks. However, some financial institutes also offer certain investment options, such as private banking. However, private banking is not available for everyone. It is a suite of special services offered to rich people or in bank jargon high net worth individuals. What is regarded as an HWNI is said to be over 1.5 crores in assets? As you would expect, there a multitude of advantages to private banking they include the following:

  1. Privacy

This is perhaps the biggest advantage of private banking. As the word suggests, private banking would imply privacy. A major disadvantage of anonymous dealings is that many illegal dealings also take place. Also, such deals take place that competitors cannot offer, and thus, it is even more important to keep the transaction private.

1. One-on-one service

One-on-one service is another critical benefit of private banking. Private banking allows a customer to go directly to a banker without going through the customer relations staff first. This is especially important when wealth management or investment decisions of high importance need to be made. Therefore, unique solutions to the client’s situation can be thought out.

2. Discounted services

It may seem unfair but if you opt for private banking you can get discounted services as well. Among the discounted services, tax preparation and planning, traveler’s checks and corporate checking are included. It has even been said that services such as real estate management can be addressed. All of these services are processed without any hassles for the customer because of the fact that they are highly prioritized as well.

3. Very high returns

This is the biggest advantage of the private banking setup. It leads to an average rate of return on investments of 7 to 13 percent. However, it can be as high as 30 percent annually. However, it is crucial to note that the main reason for this is the fact that only private bankers have access to high-return investment opportunities. The biggest example of these is hedge funds.

However, it is also worth noting that private banking also has a lot of disadvantages, including the facts that recruiting and training staff for this type of banking is very difficult and expensive. Secondly, there are regulatory restrictions and finally, it also takes a lot of time and effort and money to explain the analyses to the client. However, the advantages do outweigh the disadvantages, therefore making it one of the ideal investment options.

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