From a certain standard of living, your needs vary and more personalized banking support is necessary. To meet the expectations and needs of the wealthiest, the advisers of private banks are at the service of their customers to support them in the management of their financial wealth and in the valuation of their wealth. Reserved for a certain category of people, private banks offer access to high-end banking products suited to categories with capital to invest and grow. To find out the conditions for access to private banking services, we take stock of these high-end banking services.
Private banking: what is it?
In the banking sector, we can distinguish so-called “classic” banks intended for the general public from private banks reserved for wealthy customers, with significant financial outstanding or future assets. In the category of private banks, we can distinguish two types of players: private banks backed by a banking network (BPCE, social general private banking, LCL, BNP, Private banking) and banks independent, “pure players”, who rely on asset managers (Nebulizer OBC, Rothschild Martin Mauler, etc.).
The main mission of private banks is to guarantee high-end services, meeting the needs of people wishing to optimize and enhance their financial assets. Among the main services offered by private banks, we can cite: management of financial assets, portfolio management, advice on real estate investments, personalized services and advice… According to Philippe Cassettes, CEO of Millais Bank, the mission of private banking is the following: “The long-term support of a client, in the management of his wealth in the broad sense, that is to say not only of his finances, from birth to succession”.
Private banking: a response to specific needs
As a general rule, it is the clients who become aware of the need for support from an adviser from a private bank. This awareness is notably triggered by the client’s desire to build up an asset and make it grow. To help him in the management, enhancement and transmission of this heritage, the use of a professional from a private bank is essential. However, access to this type of service is not open to everyone. In fact, support from a private banker requires assets that are large enough to be taken care of by these specialists in the field.
How much does it cost to service a private bank?
The services of private banks being high-end and personalized, their cost is therefore higher than those of conventional banks. On average, for account maintenance and the provision of means of payment, the cost varies between 300 and 600 € per year. However, this amount can vary widely depending on customers and their needs. To diversify their wealth by investing in real estate or through the stock market, customers will have to pay additional fees. Over the year, the bill for customers can thus be several thousand Euros.
If the private banking service therefore represents a cost, these costs are assessed according to the gains for the client. Customers will therefore be ready to incur this expense provided that the financial benefits are attractive. By opting for a private bank, customers must therefore precisely define their expectations and determine the wealth they wish to grow.
Variable entry conditions depending on the bank
If having real estate assets is an asset to protect and guarantee your money, this aspect of your heritage is not what interest’s private banks. In fact, these establishments are looking for customers with short-term financial assets. This criterion will be decisive in defining the entry ticket for each customer.
Depending on the establishment, the entry threshold will vary. For private banks backed by large groups, this minimum threshold may be € 150,000 for some while others will set this threshold at several million Euros. Regarding independent banks, this entry threshold ranges from around 300,000 to 500,000 Euros.
This minimum amount of financial assets will also vary depending on the services desired by the client. Indeed, between wealth management and “classic” private banking services, support is not the same. As a result, the minimum level of financial assets can therefore vary widely depending on needs. On the market, some banks process requests on a case-by-case basis in order to capture a clientele with high potential: clients with future financial heritage. This is particularly the case for the children of wealthy clients.
The importance of choosing your private bank wisely
Depending on the bank, the service offered may be billed in the form of a package or by the service. These two pricing methods are therefore elements to take into account in your choice of bank and the offer that suits you best. Also note that the objective of private banks being to make the financial assets of their customer’s growth, there is a risk of capital loss through the various investment products offered: live securities, specialized funds. Good management adapted to your desires and your objectives therefore requires choosing the establishment most able to meet your expectations and your project.
In the private banking market, each institution is different and has its own strategy. In order to choose a private bank that suits you, several criteria will therefore be taken into account: DNA of the bank, skills and services offered, specializations, independence, reputation, price lists, rewards and prices obtained, geographic location … Before to choose the private bank to which you wish to entrust the management of your financial wealth, it is therefore advisable to take your time and to precisely define your expectations. If you meet the entry conditions for this type of establishment, you can then take advantage of many advantages and the skills of the managers.