Private banking...

[Kudos]

I know there has been discussions on this before, but wanting to get peoples views on whether it's worth it.

I'm in the fortunate position that I could be a private banking customer. I've always been prudent with my money and don't like paying for things that I can do myself for free or get cheaper e.g. why pay for a bank account that I can get free, same for credit card, booking flights etc.

Now, I've a small BTL portfolio that I'd like to increase, as well as a few other opportunities. Perhaps naively I'm thinking that as a private banking customer and I see a new property I'd like to buy I can easily call them, get finance sorted quickly/no hassle (subject to good LTV and rental income) and perhaps get a preferential rate?

So, any thoughts on whether private banking is any use, any recommendations, or stay "as is" and just do it myself and jump through the hoops on the high street?

[Newc]

Are you in the maffluent level (1m assets-ish), or the proper PB level (at least 5m liquid assets) ? The maffluent services like HSBC Premier, Citigold, Barclays Premier can be mostly evaluated on a cost-benefit basis. Do you need the insurances and other services, and are they worth more to you than the fees. Can you place a value on access to UK based nominated staff ? Will you use the facilities ?

Proper PB is mostly about asset management (for you) and portfolio and dealing fees (for them). The banking services get chucked in for free, and if you're into the genuine HNW level of 20m or so you can have whatever you want, 24/7. So if you are happy to have someone else do the asset management for you and can negotiate performance fees rather than management fees, it's usually worth it.

[Kudos]

swerni said:

What do you think private banking offers?
What would you want it to do for you?

I'm asking what it offers. Does it mean I can lift a phone and say "I'd like a mortgage for £x's, can you sort that without me jumping through 100 hoops" and hopefully getting access to better rates

Do any of their investments have better rates than normal?

[bad company]

I left Lloyds private bank recently after several years. I just got fed up paying them 1% to manage my portfolio when I can and do run it myself.

[bennyboydurham]

I have private banking with Yorkshire Bank and although I am a director I am neither powerfully built nor goateed and my income is miles off the 'official' level at which I'd qualify for PB, but they offered it me anyway. I get free travel insurance and a natty black debit MasterCard and that's about it although it's great to have one single point of contact for everything. No more call centres, no more queues, no being just a number and that's worth the small monthly fee to me.

[Kudos]

Thanks all. I'm not looking it for the sake of having it and being able to flash a fancy card around (none of my mates will know what they are anyway).

I don't use a branch very often, majority of transactions are online, so not too concerned there.
My main benefit would be being able to get access to better borrowing rates (and eventually investments) and be able to speak to someone without having to give them pages of info repeatedly including inside leg measurement and only to be told "computer says no".

[raptor600]

Don't get your hopes up.

I would bank with someone smaller like Handelsbanken if you want a personal service.

[Dave_ITR]

Without knowing fully the extent of your assets it is very difficult to say but I suspect that you are at a level where you would benefit from an upgraded account such as HSBC Premier as opposed to a proper private banking service.

[jonny996]

For me it is are the add ons worth the fee.

Free AA, I nice cars but chose to but at 6 year old to avoid huge depresiation & dont have warrenties, so worth it.

Free family travel insurance, we go a lot of independant holidays so worth it.

Free mobile phone insurance, 2 pay as you go Iphones so worth it.

Free ID theft, just had cards stolen so worth it.

Single point of contact, worth every penny.

It may be me but unless you need all the above it is not worth it, mines is also free (well i get no intrest ) if I keep £10K in the account.

[chris7676]

jonny996 said:

For me it is are the add ons worth the fee.
....
Free ID theft, just had cards stolen so worth it.

Did't realise it got to that, you pay them to steal your cards, or is it really FREE ?

Edited by chris7676 on Wednesday 7th March 15:55

[Jonathan27]

It seems quite a few people don't get the difference between private banking and premier banking.

[Cheib]

Completely depends on the bank and what kind of services they offer. I have an HSBC Private Bank account and am actually just in the process of downgrading to Premier....I just don't think the products they offer are really worth it. Yes you do get a proper relationship manager but you do to an extent with HSBC Premier too...when I had a Barclays Premier account years ago that changed to an 0800 service.

With regards to the kinds of services that HSBC offer Private Bank customers...you can go to Investment Seminars etc and they offer things like deposits links to FTSE performance etc but to be honest I don't think any of the products they offer is that great. They are targetting cash rich time poor people...there only interested in lending sums circa £1mil which I don't need to borrow and want people to invest similar sums which I don't want to do either! They also had a Property Search service. The relationship manager can pull some strings and authorise things on the back of a phone call/e-mail that would normally require a trip to the branch but these things are relatively rare.

Really these businesses are targetting people that I would call properly rich....say £20mil plus. At that point they will be able to offer you genuine bespoke investments (which probably require a minimum investment of £1mil a time) access to Hedge Fund investment teams etc etc

As someone that works as a fund manager managing money for a living I can tell you that every investment product, deposit interest rate, or loan I have been offered I can better elsewhere...some of it is mind blowingly expensive unless you can go the bespoke route.....the best thing about HSBC is that they are pretty much the safest bank to have your cash deposited with! If you are "time poor" yes they can do things at short notice but they'll charge you for it...if you are organised you can always do better elsewhere.

[z4chris99]

swerni said:

Jonathan27 said:

It seems quite a few people don't get the difference between private banking and premier banking.

I'd agree 100%.

indeed,

premier banking - higher service offered from existing banks, fancy card etc. I.e HSBC premier, coutts black, blah blah

private banking - nice Swiss man who controls your money, no cards etc, but access to funds and products as an individual you wouldn't have, takes you to nice dinners and is available at the drop of a hat.

I don't think HSBC premier even have their own yacht.....

me having fun

Edited by z4chris99 on Wednesday 7th March 16:46

[z4chris99]

had a guest lecture from a few private banks last night, they explained their customers as:

core 5-10m in investable assets
high 10-50
ultra 50+

they would go down to 1m for exceptional cases

[Kudos]

z4chris99 said:

me having fun

Edited by z4chris99 on Wednesday 7th March 16:46

were you getting paid to drive this, or there as a guest?

[anonymous-user]

z4chris99 said:

had a guest lecture from a few private banks last night, they explained their customers as:

core 5-10m in investable assets
high 10-50
ultra 50+

they would go down to 1m for exceptional cases

Which banks were they?

[Cheib]

MRSNEAK said:

z4chris99 said:

had a guest lecture from a few private banks last night, they explained their customers as:

core 5-10m in investable assets
high 10-50
ultra 50+

they would go down to 1m for exceptional cases

Which banks were they?

That sounds very similar to HSBC's crieria to me.

The minimum transaction they are interested in is £1mil (i.e. investment or loan). They only take people with £1mil in assets if they are looking at you as someone with potential to be worth a lot more.......

[z4chris99]

Kudos said:

were you getting paid to drive this, or there as a guest?

5th man vip guest, i dont bank with them but someone i know does. it was in the last round of the E40 Sailing race.

Edited by z4chris99 on Thursday 8th March 09:49

[z4chris99]

MRSNEAK said:

z4chris99 said:

had a guest lecture from a few private banks last night, they explained their customers as:

core 5-10m in investable assets
high 10-50
ultra 50+

they would go down to 1m for exceptional cases

Which banks were they?

Barc Wealth, I know UBS, KB, Bank Privee Ed de Rothechild etc... have similar requirments.

You will get away i think with a lower level in the more boutique swiss based banks

Edited by z4chris99 on Thursday 8th March 11:37

[anonymous-user]

swerni said:

z4chris99 said:

had a guest lecture from a few private banks last night, they explained their customers as:

core 5-10m in investable assets
high 10-50
ultra 50+

they would go down to 1m for exceptional cases

You'd be surprised how low they will go down.

I was always impressed with some of the business models.
They know who their current client base is.
They can speculate who their future base will be and they take some bets in this space.
You can have a very low capital base but if they believe it may grow substantially they may take you on

( well this use to be the case)

Still is. All banks mentioned above would jump at the chance to take on £1m of business, even if that was everything the client had to bring to the table - especially in the regions outside of London.

As has been said before, Private Banking means different things to different people in different countries.

I don't class any of the retail private banks as anything other than red carpet banking. Sure they will offer you perks, flash credit cards etc, but the financial services they offer are very similair to those they offer to their retail clients.

To me, a real private bank will give you access to a Private Banker who will provide a discrete personal services covering everthing from day to day transaction banking, tailored credit facilities and independant (fee based, not commision based) financial planning and investment advice.