Although private banking is not a simple business, there is a very simple model to keep in mind: “keeping rich people happy”. The definition of private banking varies but is generally understood as investment management offered on a personal basis by a bank to an individual with disposable wealth of more than, let’s say, $1,000,000.
Private banks were originally so called because they were owned by wealthy private individuals. Under Swiss law these bankers were personally liable for the obligations of the bank. If a bank failed, bankruptcy was not an option. It was disgrace and jail. As a result, no old line private banks ever failed.
With globalization and the need to serve customers abroad, almost all the old ‘private banks’ have now been bought out and are subsidiaries of bigger international banks. Though, if you have the cash and the desire, there are a few true private banks remaining. Some of them are so discreet that they don’t even have a nameplate outside their offices. All of them should offer an online savings account so you can access your funds remotely from any location on the globe. They also offer killer online bank account rates.
Anyone can get a personal private banker assigned in an elite private bank with about €300,000 opening deposit. When we say walk in, you will of course need an introduction, identification and references.
Private banks offer all kinds of accounts, from simple cheque and deposit accounts to complicated commodity and swap operations, and even – yes – investments in sub-prime mortgage-backed securities.
Private bankers normally prefer to be approached and considered as objective financial advisers or family confidants rather than as an investment salesman when starting a business. They are wealth managers, accustomed to dealing with the wealthy, and their services don’t come cheap.
Consequently private banks may
not be the most effective choice for a reasonably sophisticated a monthly basis, then private banking is just what you need. You can expect and demand above-average returns and an extremely high level of personal service.
For a complete list of private banks or to find the one best suited to your needs, contact Peter Macfarlane at www.petermacfarlane.net or info@buildwealthoffshore.com