Specializing in the management of large portfolios, a private bank offers high-end services to its clients with regard to the management of their wealth. Private banks can be isolated companies, but often they are an additional service to commercial banks.
What is a private bank?
A private bank is a bank that offers personalized and extensive services. She is mainly specialized in the management of financial portfolios and wealth.Historically, private banks have been family banks. Today, a private bank can be a specialized bank or be a department apart from a generalist bank.
A private bank can be oriented towards a clientele:
Who is private banking for?
Private banking is mainly aimed at clients who have a certain level of financial assets or income. You can benefit from the services of a private bank if you have at least:
- € 70,000 in financial assets;
- or € 50,000 in annual income.
However, a private bank generally deals with the money of individuals whose net worth is very important . For most banks, the floor amount is € 150,000, but it can amount to € 1 million.
A private bank has 3 different management levels:
- asset management : for amounts between 150 K € and 1 M €;
- private management : for amounts between 1 M € and 5 M €;
- wealth management : for amounts greater than € 5 million.
Note : there is also a management system reserved for wealthy families known as “family offices”.
- Wealth management is mainly aimed at clients who have income or financial assets between € 50,000 and € 1 million. These services aim to offer:
- real estate loans dedicated to rental investment;
- high-end life insurance;
- wealth management advice;
- investment advice.
Asset management, or private management, is aimed at clients who have between 1 and 5 million Euros in income or financial assets.
- Customers benefit above all from advice, whether at
- In addition to this, they benefit from all the high-end banking services with:
- means of payment with high ceilings;
- comprehensive insurance at international level;
- personalized follow-up.
Wealth management concerns clients who have at least 5 million Euros in financial assets. The private bank will then offer private or professional customers to manage everything related to:
- transactions in the event of sale;
- family heritage;
- estate, etc.
Management forms of a private bank
A private bank can manage an asset or a fortune in two different ways: in assisted management or in delegated management.
As the name suggests, it is simply assistance in the form of advice. The clients are supported by an asset manager, but it is they who carry out the operations as they wish. It is therefore preferable that the client knows a minimum the tricks of finance.Note : assisted management is not necessarily offered by all banking establishments.
When the asset manager himself takes over part of the asset, this is called delegated management. In other words, the client entrusts the management of already constituted capital to a specialized banker. For management to be effective, a management mandate must be signed in favor of the manager.
Services offered by a private bank
With wealth managers having a small number of clients to manage, money management in private banking is very personalized and relationships are privileged. In order to best balance the wealth of customers, the main services offered by a private bank are:
- financial and patrimonial expertise;
- investment advice: purchase of securities, real estate, works of art, etc. ;
- investment advice;
- Advice on retirement, insurance and inheritance.
Private banking: access to the service
The subscription to this kind of service is generally done annually by paying the bank a fee in the form of fees.It is not easy to assess the cost of a subscription to a private bank because it depends on the bank itself, on the services offered but also and above all on the value of the assets to be managed.