If you have amassed a sizeable amount of wealth, the challenge comes with knowing how best to manage it. There are tax considerations, protecting it for your future generations, and investing it across various time horizons to optimise returns.
For those who are fortunate enough to have lots of money to worry about, private banking is an avenue you can turn to, with personalised service, access to different financial products, and even preferential rates for loans and other perks.
So, if you ever wanted to know what private banking is all about, and how much you’ll need to open an account, read on.
What Is Private Banking?
Private banking is a term to describe financial services that banks provide to high-net-worth individuals.
Some may use priority banking interchangeably with private banking. While both are somewhat similar, there are some key differences.
Priority banking is targeted at affluent customers who can afford to deposit and spend a large sum of money with a bank. In return for the investment, the bank will accord VIP status for these customers, such as providing them with preferential rates on savings or loans, priority queues or special branches, as well as a personal banker.
On the other hand, private banking is a level up from priority banking. Besides enjoying the privileges of priority banking clients, private banking clients will stand to benefit from a wider range of wealth management services, such as investments, portfolio management and estate planning.
To protect the privacy of the dealings and transactions, private banking clients will also be assigned a dedicated relationship manager or private banker to handle their enquiries and transactions. While their assistance can be called upon for payment of bills and arranging a new mortgage, clients can also rely on their advice on personalised investment strategies and asset management.
What Are The Minimum Requirements To Be A Private Banking Client?
Another difference between priority and private banking is the asset under management (AUM). For private banking clients, a minimum AUM of $1 million is required to start a private banking relationship. This is a far cry from a lower threshold for priority banking, such as Citibank Priority Banking’s minimum amount of $70,000 of AUM.
Below are some of the minimum asset under management required to join the bank’s respective private banking circle:
|DBS||DBS Treasures Private Client||$1.5 million|
|DBS||DBS Private Bank||$5 million|
|UOB||UOB Privilege Reserve||$2 Million|
|UOB||UOB Private Bank||$5 Million|
|OCBC||OCBC Premier Private Client||$1 Million|
|Citibank||Citigold Private Client||$1.5 Million|
|HSBC||HSBC Private Bank||USD$5 Million|
|Standard Chartered||Priority Private||$1.5 Million|
All figures in SGD unless otherwise stated.
Unique Benefits And Services Offered By Private Banking
As mentioned earlier, besides having a dedicated relationship manager or private banker to serve clients for regular banking services, private banking clients can also access advice from specialists on tax, legal and other financial matters.
Private banking also gives you access to special investment products and services only available to them, such as exclusive hedge funds or private equity partnerships. These are on top of enjoying preferential offerings and pricing on interest rates, loans, credit fees and overdraft charges.
Banks may also provide other personalised privileges and services for their private banking clients as well.
For instance, DBS Treasures Private Client provides a specialised network for their clients that allow them to connect to partners and opportunities worldwide, while UOB Private Banking clients can make use of their dedicated medical concierge, as well as a travel concierge that provides clients with exclusive cashback on hotels, cruises and other luxury products. Banks such as OCBC and HSBC provide their clients with bespoke wealth management solutions that assist their clients in portfolio financing and legacy planning.
With any other investments in the market, there is no one-size-fits-all model when it comes to choosing a private bank.
If you happen to be eligible to be a private banking client one day, perhaps one consideration would be if the perks are worth parking a large chunk of your funds in a single institution. For those whose answer is a resounding “Yes!”, welcome to the world of private banking and all the perks it comes with.
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