The enlarging demand of entrepreneurs and millionaires across the world has brought a requirement of a banking service that will not only assist them in their regular banking solutions but also provide them a standardized platform to manage their investment and tax procedures. Yes, this is the time when you need more than just wealth management services to improve your financial stability. This is where the concept of private banking comes into the scenario. This type of banking service is offered to people who have reached a certain level with their income or finance.
If you are also seeking what it is exactly, this blog lights on the concept in a brief manner as well as explain its offered services. Let’s find out.
Many individuals confuse private banking with private bank but it’s not. Private banks are the banks owned privately by any individual or partner. On the other hand, private banking is a form of personalized banking and financial services that are provided by the banks to clients with high net worth or insane amounts of assets.
It is also known as “relationship management,” and includes more than just wealth management banking services, for example, investing, portfolio management, tax management, insurance, estate planning, brokerage, and many other financial services.
Unlike retail banking, private banking revolves around more personalized banking & financial services to its clients.
The clients are not required to visit the branch in person. Instead, they can contact their private bankers to get the task done.
The services under private banking are not supposed to be the same. They can vary from bank to bank but the following are the services & products that you are likely to find at many banks. Let’s take a look:
1. Investment Planning & Advice - The role of private banking services is most commonly associated with managing and planning your investment needs. It is one of the foremost functions of private bankers to improve the financial stability of their clients by presenting them with the most suitable, customized, and trendy investment plans that are focused on fulfilling their financial goals.
2. Tax Planning - Private bankers also help you mitigate or reduce the tax burden and provide you with the best strategies to manage your tax necessities as per the current tax law. They also advise you in case the law changes in the future.
3. Estate Planning - The private banking clients can also take the advantage of estate planning facilities provided by the bankers. They go through your business activities and suggest to you the most suitable & effective ways of securing wealth for the upcoming generation.
4. Lending (Loans & Mortgages) -Private bankers also provide you with the personalized loan services for several reasons such as purchasing land, property, or anything else. So, if you are looking to make a big investment, call your private bankers.
5. Credit - Private banking services also offer lines of credit with low rates. They are designed to optimize your cash flow and expenses.
6. Financial Planning - Sometimes the clients struggle in managing their financial decisions such as how much they should invest, or how & when to start saving for a child's career goals, etc. A private banker can address all these issues by giving you the best & suitable advice.
7. Risk Management - With so many assets at risk for ROI, this service becomes crucial to handle the market fluctuations and cope with liquidity risks.
8. Cash Flow Management - Are you having difficulties managing your cash flow. Private banking services strive to help clients manage their cash flows effectively along with the handling of bill payments.
In addition to these products & services, there are many other perks & advantages of availing private banking such as preferential rates and pricing on deposit accounts, high-interest rates, exemption from fees of overdrafts, and better foreign exchange rates, and many more. Private banking eases the task of managing your financial activities under one roof and if you have multiple assets, you should consider private banking.