Private Banks: any good or just deeper carpet?

[67Dino]

Does anyone use a “Private Bank” like Coutts, and if so, are they worth whatever they cost (a lot I presume)?

Or are they much the same as a regular bank but just with nicer coffee and deeper pile carpets?

[JeffreyD]

67Dino said:

Does anyone use a “Private Bank” like Coutts, and if so, are they worth whatever they cost (a lot I presume)?

Or are they much the same as a regular bank but just with nicer coffee and deeper pile carpets?

They don't cost anything if you have enough money.

Depends what your needs are.
If it's standard everyday banking and mortgage you can do better elsewhere.

Edit: does anyone visit a bank anymore???

[Simpo Two]

JeffreyD said:

Edit: does anyone visit a bank anymore???

There's quite often a queue outside my local Barclays, though part of that may be Covid related.

[eliot]

JeffreyD said:

Edit: does anyone visit a bank anymore???

I send the butler down obviously..

[h0b0]

Many of the high street banks have a “private” offering. You aren’t going to qualify if your life savings are 48p though.

Also, the private options are not offering 20% interest as everyone assumes. My bank offers 0.5% off mortgage rates. Finally, there are still levels to work through. For example, one bank may have shared advice up to $1M invested with them and then individual above that. Yes, the entry point of private from $250k - $1M can be shared info from an adviser working with a pool of other people.

[LooneyTunes]

h0b0 said:

Many of the high street banks have a “private” offering. You aren’t going to qualify if your life savings are 48p though.

They’re often not the same as a true private offering insofar as things like the banking apps, transfer limits, etc can be the same as they give to other consumers but you’ll probably not be waiting in the same call centre queue. Where they can work better than the true private offerings is if you need banking services that are technically available in other parts of a much larger group but where you might still struggle to get access.

The true private offerings can provide more specialist investment products, online banking services more akin to corporate banking platforms (for example, set up and release sizeable payments, international payments, etc), credit/charge cards with very high limits, etc. If you don’t actually need them then clearly there’s no benefit to them being there. Occasionally you see interesting stuff, like being able to offset interest from parents accounts against children’s mortgages or have foreign currency banking and cards but the value again depends on your needs.

There are often international/offshore options with each (although, cynically, I suspect some bankers won’t like to promote these if result in money moving off their management totals). They will all also try to provide “wealth management” and inheritance tax planning services but you need to be careful as the focus can sometimes be “how can we sell our services”. Quite why you’d want your bank to help set up your will I’m not sure, but obviously enough people want that sort of service for them to offer it.

Some banks are good, some of them less good, some highly dependent on which branch you work with/who your relationship manager is. In any event, the RM works for the bank and is tasked with keeping you as a customer (assuming you’re profitable) whilst making money from you.

[diametric123]

Hi OP

I was with Coutts for 5 years, then switched back to the private banking division of a High St bank and also a wealth management company or two

Coutts was amazing in some regards - fantastic customer service, would lend money without any questions, good benefits etc. The downside was that you need to use their advisory services a lot or it isn't worth it. I didn't need an advisory relationship at the time and we got into a lot of tricky conversations where they wanted me to invest in certain asset classes and I didn't want to go there

I've now evolved my views and need more advice, which I'm happy to pay for - that led me to a couple of specialist firms rather than a general retail bank

In terms of cost - if you are looking for a holistic advisory relationship I suspect its fair value. If not, expensive

[mikey_b]

h0b0 said:

...the private options are not offering 20% interest as everyone assumes. My bank offers 0.5% off mortgage rates.

With mortgage interest rates bubbling around 1-2%, that's a heck of a saving.

[dmahon]

They all seem to want to invest your money rather than just look after your savings and charge for better service. Vanguard is so good and cost effective that I don’t see how you can justify the fees going elsewhere.

I would also feel nervous having my life savings with one of the smaller organisations over an HSBC or Barclays.

The lending side makes sense. I just remortgaged a BTL and it was hard work in the market.

Would like a Coutts account for the ego but overall not really worth it.

[h0b0]

mikey_b said:

h0b0 said:

...the private options are not offering 20% interest as everyone assumes. My bank offers 0.5% off mortgage rates.

With mortgage interest rates bubbling around 1-2%, that's a heck of a saving.

Not in the US, where I am based, unfortunately.

[67Dino]

Thanks for all the comments, some genuinely helpful pointers there. Would love to hear opinions on specific institutions (if that’s permitted on PH).

[HootersGsy]

brickwall said:

This. They do have better service - decent people as named account managers, experts available to call on for advice, UK-staffed high-quality call centres, and shiny offices.

This is a much much higher cost to serve per customer, so each customer has to be generating a lot of revenue to make it profitable.

Sitting on a large chunk of savings doesn’t make them money. Customers need to be generating fees from investment management or other services, or NIM from loans.

It must be a pretty tough sell actually for lots of “ordinary” wealthy people without bespoke needs. Even if the numbers are higher, you’ll want a decent app just like everyone else. If you need a bog standard mortgage, even if it’s for £3m, you’ll be comparing interest rates just like everyone else.

At £3m I don't think the high street banks would touch you! You can get very good loan rates with the private banks if you have your investment portfolio with them as they can lend against that rather than the property - an investment portfolio is a lot easier to call in if you stop making interest payments.

[LooneyTunes]

67Dino said:

Would love to hear opinions on specific institutions (if that’s permitted on PH).

They’re all quite varied in what they offer, sectors they focus on, and how easy they are to get into. Some of the products can also be quite niche. For example, some will take you if you earn £250kpa, others focus on landowners, some have better international services than others, some keep more closely to regular office hours, etc.

If you give people an idea of what you’re looking for then someone may be able to suggest one or two that might be worth looking at.

[Alexandra]

diametric123 said:

Hi OP

I was with Coutts for 5 years, then switched back to the private banking division of a High St bank and also a wealth management company or two

Coutts was amazing in some regards - fantastic customer service, would lend money without any questions, good benefits etc. The downside was that you need to use their advisory services a lot or it isn't worth it.

This was my experience with Coutts. I've said before, the dedicated account managers were brilliant and knew my investments inside and out. That said, I had a change of circumstance with moving country and didn't feel connected to the bank any more so closed the accounts.

I'm in the US now and with JP Morgan. JPM have all the same facilities as you'd expect from those private banks and I'm happy enough. There are some nice perks but not many that I use.

Happy to answer any questions.

[dodgydave]

The Coutts concierge service is pretty good.
You’ll get into restaurants that might not find you a table otherwise.

And you get offered free tickets for events, like Salon Prive etc.

But if you just want vanilla banking then £900 a year for a current account is probably an indulgence.

[Al Gorithum]

Coutts has changed it's a/c opening requirements recently. You have to either deposit £1m with their investment team (which doesn't have a competitive return) or take out a big mortgage (which also isn't particularly competitive).

Also, I'm told by my accountant that HMRC pay more attention to those using private banks.

The service is excellent though.