Understanding the Difference Between Private Banking and Wealth Management
March 24, 2022
When considering private banking and wealth management, there are similarities as well as distinctions. For the best result, a critical element is to ensure that both truly align with the unique needs and goals of the individual and the people most important to them. With this in mind, the most compelling solution may be to work with a trusted partner who can offer the personalization of a private banking experience along with the expertise needed to develop a long term wealth management plan.
Private Banking vs. Wealth Management
Private banking generally refers to banking services, which can include depository, lending (including mortgages) and other related services, which cater to affluent clients, their families and businesses, and often where those clients require more complex solutions to meet their banking needs. The specific definition of “affluency” or “wealth” varies among financial institutions, and while many banks may offer private banking services for clients, the level of personalized care and access to tailored solutions are part of what set preferred providers apart from others in the market.
Wealth management services, in contrast, includes a more comprehensive view of a client’s overall wealth, needs and goals. An individual client’s needs may include private banking services (for their personal, family and/or business related needs), but often extend beyond private banking to also include areas such as trust and estate related needs, investment management, insurance, and retirement planning and many other areas. In this context, true wealth management considers the unique needs and objectives of each client, and actively tailors a wealth plan which aligns with their evolving goals to help them reach their objectives.
While there are differences, and there are many providers who offer private banking or elements of wealth management services, selecting a trusted partner who understands both sides, and has the ability to deliver integrated solutions as part of a complete wealth plan, can offer ample and lasting benefits.
Private Banking: Tailored Services, Trusted Support
In addition to offering core banking services related to checking and savings accounts, payment services and fraud management tools, and convenient access through online and app-based channels, private banking often includes lending services such as lines of credit and mortgage products – which, depending on the institution, may be customized to fit the unique needs of private banking clients.
Beyond the specific services, clients may also seek private banking services where they are supported by a trusted team of local banking experts who can recommend banking strategies and solutions in line with each client’s needs. In addition, providers who provide expertise and advice beyond private banking for wealth creators offer a compelling value for their clients.
Wealth Management and Peace of Mind
Wealth management offers the ability to align goals, values and objectives with a strategy to help clients realize their vision for their wealth over the long term – and potentially for generations to come. Under the guidance of experienced professionals, complete plans are not limited to single aspects of wealth such as investment management or trust related services, rather they consider multiple dimensions of wealth such as financial wealth, relational wealth, experiential wealth and even legacy wealth – and include strategies within each dimension to help clients achieve goals within those areas.
A portion of wealth management providers may also offer the services clients need to deliver on the strategies they design with and for their clients. Such services may include investment management, insurance services, trust and estate services, and even retirement services. Although most wealth managers do not serve as legal or tax experts, experienced providers may offer to work with accounting, legal or tax professionals to ensure clients understand the impact of strategies within their overall wealth plan.
A subset of wealth management providers offer some or all of their services as a fiduciary – ensuring they are always acting in the best interests of their clients. This level of service, when coupled with comprehensive wealth planning expertise, provides clients with peace of mind that their assets are protected and being well-managed by a trusted team.
A Unique Approach
If you are researching the relative merits of a private banking or wealth management relationship – or looking to compare the services you are currently receiving with others available to you – we encourage you to review our comprehensive approach at First Western Trust.
Based on our belief that each client is unique, and deserves a personalized wealth plan as unique as they are, we have developed a proprietary approach to manage your wealth across all dimensions. This approach is called ConnectView®, and can include private banking services as part of a comprehensive plan.
Together with our trusted local teams, and supported by experienced professionals across disciplines, First Western offers a tailored private banking and wealth management experience to meet your individual needs – removing the need to choose between a high level of service and access to sophisticated banking and wealth management services.