Private Bank Account Opening

For the right clients, private banking can offer a variety of attractive benefits. 

Here’s a look at the most best benefits to take advantage of with private banking.

Dedicated Personal Account Advisor

Having a dedicated personal account advisor means no more waiting on hold for the first available representative. Instead, you have an assigned banker on speed dial ready to help you with your specific banking needs. 

A personal account advisor that becomes familiar with your financial situation allows for a more seamless banking experience, as your advisor tailors products, services, and opportunities to your financial and banking needs. 

Alternative Investment Opportunities

Private banking can give you access to alternative investment opportunities not available in most retail banks. 

For instance, private banking can give you exclusive access to invest in top-performing hedge funds or private equity partnerships. 

Not all banks offer the same investment opportunities. So, before applying for an account with a private bank, make sure you familiarize yourself with the investment products the bank offers. 

Discounted Pricing on Products & Services

Another benefit of private banking is access to preferential rates on financial products, including lower interest rates on loans and mortgages, free safe deposit boxes, and more. 

And, depending on the private bank you choose to go with, you can also unlock additional perks including exclusive events, special introductions, unique experiences, personal invites, and much more.

Ultimately, the benefits your client profile can unlock will come down to the private bank you choose to open with, your deposit size, and the products and services you want to tap into. 

Disadvantages of Private Banking

Before deciding whether or not private banking is right for you, it’s important you fully understand the concept of “what is private banking”. This means not only understanding the benefits and perks, but also the disadvantages.

With this in mind, let’s look at some of the main disadvantages of private banking…

1. High Management Fees

As attractive as private banking can be, it can become very expensive quickly. Unlike regular banks, private banks impose higher management fees because of the exclusive products and services they offer. 

Private bank management fees can include both fixed or sliding fees. The fixed fees typically come from monthly service fees, charges on investments, or fees for falling below your minimum account balance. In addition, some banks will also charge a sliding fee set as a percentage of the total assets under management.

So, before you apply to open an account with a private bank, we suggest reviewing the bank’s fee structure to make sure you can support all the expected costs. 

2. Turnover of Private Bankers

Something that most people don’t expect is that the employee turnover rate is generally much higher in private banks than in most retail banks. So, while a private bank will offer you a personalized account advisor, it’s not guaranteed you will have the same advisor for the duration of your time with the bank. 

This can be frustrating for private banking clients that seek to build a long-term relationship with their advisor. 

Oftentimes clients have a stronger connection with their banker than with the bank itself and so they will want to switch banks along with them. Unfortunately, some banks have set up safeguards to restrict clients from doing this.So, when choosing which private bank to open an account with, be sure to check what restrictions the private bank might have in place around exiting the account. 

3. Limited Product Offerings

Private banks sometimes have limited investment products to choose from because they only offer their own internal investment products. 

If you want to have more flexibility and access to a wider range of international investment products, you may prefer to deal with an independent asset manager that can find products from a range of different banks. Or you can look for a private bank that offers investment products from other banks as well. .

As always, before applying, it’s important to confirm the private bank’s investment options to determine whether or not they include what you are looking for. You also want to confirm that there are no restrictions to what products and services you can access given your citizenship/residency etc.