This kind of banking is conventionally offered to a bank’s high net worth individual (HNWI) clients. It is a personalised financial and banking service. This is typically done for wealth Management because the High net worth individual clients have accumulated more wealth than a normal average person and therefore they have the means to access a more diverse and large variety of conventional and alternative investments. Private banks have thus come up with private banking in order to match such individuals with options that suit them better.
Private banking doesn’t just provide excellent and exclusive investment advice, it goes much further and addresses a client’s entire financial situation. These services include helping the clients with special financial solutions, protecting and growing assets in the present, retirement planning and passing wealth on to future generations.
Some exclusive private banks accepts clients with at least $500,000 worth of investable assets. This is because such a high level of wealth lets the clients to be a part of alternative investment methods such as hedge funds and real estate.And a person who has this level of wealth will never have any liquidity problems. Morgan Stanley, Merill Lynch, Credit Suisse, UBS are examples of private banks.
The customers of a private bank receive exclusive personalised service. A relationship manager is assigned to every account holder to deliver a tailor made customised asset management plan. This is why the customers can also directly liaise with the management officials if ever the need arises.
High net worth individuals typically get services at a huge discount in private banks because of their huge assets. For exchange customers who have export business might receive a reduced foreign exchange rate. They are provided with a lot better investment options by the private banks, investments with returns that outperform the market.
Challenges with a private bank
The private banks have always dealt with a lot of regulatory environment since the GFC or the Global financial crisis in the year 2008. This is why there is a higher level of transparency and accountability. The licensing requirements for the private banking professionals are hugely stringent and ultimately this benefits the customers because it assures them that they are getting the best advices with regards to their money and assets!
Since the Global financial Crisis happened the private banks have experienced a high employee turnover which finally resulted in need to focus on talent recruitment. A long-standing customer relationship is mandatory for the success of a private bank which is why there is a need to keep the employees satisfied as well so that a higher level of customer satisfaction can be achieved. Because only if the employees are happy will they do their work better and it will thus bring success to the company!