Why Choose Private Banking?
August 12, 2022
The term “Private Banking” does not always ring a bell for the average consumer, so in many instances, they do not know what they’re missing by simply placing their funds in a run-of-the-mill public bank. High net worth individuals (HNWI), who have done well financially, have more choices when it comes to banking and consistently prefer the advantages of a private banking experience.
The clientele and the elite services offered are the main differences between public and private banking, but there is some crossover between the two. Many public banks offer private banking to certain clients through a special department designed to deliver additional services, but this add-on approach rarely lives up to the depth and breadth of a true private bank.
When an individual has the assets to qualify for private banking, they should give due consideration to the proven advantages an exclusively private banking relationship provides over traditional banking services and add-on private banking from a public institution.
Personal Management Representative or Team
Private banks offer their clients a completely personalized experience. At minimum, clients with a private banking relationship have a personal account manager and a strong dedicated team that handles all their money needs such as deposits, fund transfers, investments, and financial advice. These teams make it their business to be available for their clients, ensuring a level of convenience and professionalism that is unmatched in public banking.
Additionally, this personalized experience often leads to better proactive solutions. Having a deep understanding of your client’s needs, goals, and personal situation, coupled with a dedicated team of experts specializing in different financial areas, leads to better planning and tailored solutions. Suffice it to say that private banks take great care to please all their clients.
Lower Prices on Financial Products
Everyone loves a bargain, even those people with impressive financial assets. In recognition of their significant relationships, private banks usually offer these customers special discounts and lower financial product prices. They may be given prime interest rates on mortgages and loans, as well as additional special terms concerning the length of their loans and payment schedules.
Clients of private banks may earn higher interest rates for their deposit accounts and their services often come fee-free. In some cases, clients may be given more favorable foreign exchange rates, which is particularly appealing for those who travel often.
Not surprisingly, a private bank offers its clients greater privacy for their financial dealings. All customer interactions and transactions are performed by the client’s well-known and dedicated team. Client information is not shared with third parties for undesired or unneeded sales and marketing campaigns. And alternative investment offerings are in-house proprietary products that are kept confidential.
Private bank clients crave privacy because their business competitors will often seek out personal information to use to their advantage. Also, high-profile clients may simply want to keep their private matters out of the public eye for their own peace of mind. Private banks pride themselves on protecting their clients’ information.
Access to Special Investments
Private banks offer their clients access to investment opportunities that the average public banking customer may not be privy to. For instance, some private banks offer their clients a chance to invest in a unique hedge fund or private equity partnership. These alternative investments are not only exclusive — they can be extremely lucrative. The typical public bank client does not receive this type of investment access.
Business owners that establish both personal and business accounts at a private bank can benefit from the combined relationship. This arrangement forges a stronger connection between the bank and client and can lead to business account perks, such as better loan opportunities and discounted financial products and services for the overall relationship. This structure also enables financial experts to better understand and provide guidance on all aspects of the business owner’s personal and commercial needs by having a stronger understanding of their overarching financial picture. Lastly, the business owners can rely on the same dedicated team to provide support, solutions, and advice whether their needs are consumer or commercial-focused.
High Convenience Level
For many clients, the biggest advantage of a private bank is the convenience. All major money management issues or requests can be handled in one place while working with a known single point of contact. Private banks often allow more flexibility on how requests are made, whether it’s through online channels, phone, or email; while public banks require in person requests. It takes much of the stress out of money management for the client when they find a trusted private banking service. A private bank simplifies the life of clients while helping them to maximize their investments. One-stop money management is quite attractive to many.
Private banking offers several valuable benefits including privacy, customized service, private representatives, and more. Private banks offer services that are essential for those with significant assets and are not desirable simply because they are exclusive. For many, private banking is not a luxury but a practical and profitable way to manage their money.
The First Western Trust Advantage
First Western Trust has decades of private banking experience that blends specialized boutique banking with financial sophistication. Contact our financial experts to find out how our private and commercial banking relationship can benefit you.