Private banking vs private wealth management is one of the most misunderstood topics in the banking and investment world. So, we’re going to finally set the record straight.
We’ll also share where you can access both private bank accounts and private wealth management services, including some popular options like the Cayman Islands and those available in Switzerland, Liechtenstein, and Luxembourg.
Feel free to use the table of contents to skip ahead to the topics that are most relevant to you:
Table of Contents
- Private Banking vs Wealth Management
- What is Private Banking?
- What is Private Wealth Management?
- Private Banking & Private Wealth Management Jurisdictions
- Private Banking Minimum Requirements
Private Banking vs Wealth Management
Let’s jump right into the difference between private banking and private wealth management…
What’s the Difference?
Ultimately, the difference between private banking and wealth management boils down to the level of involvement that the bank and relationship manager have in assisting the client with their financial decisions.
Let’s take a closer look…
What is Private Banking?
Private banking typically refers to opening an account and investing a portion of the account balance through the bank. To be clear, this is not the same as opening a basic account with banks in a foreign country, like the UAE or the Isle of Man.
Investments are typically executed on behalf of the client through discretionary management where the bank follows specific guidelines based on the client’s risk appetite or an agreed upon investment mandate.
Alternatively, the client may have a relationship with an external or independent asset manager who is charged with directing their investments. The accounts are then held on behalf of the client at a private bank.
In short, private banking involves the opening of accounts and management of investments on behalf of the client.
Now, let’s take a look at private wealth management and see how the two differ.
What is Private Wealth Management?
Private wealth management does include the banking and investment services referenced in private banking above. However, it typically expands to include other areas of the client’s financial life as well.
For example, private wealth management can include planning and advisory services related to tax efficiency, inheritance planning, financing of private investments, financial education for younger generations, and much more.
In other words, it is a much more holistic approach to helping clients manage their financial lives, reach their financial goals, and optimize for certain benefits that they desire.
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Private Banking & Private Wealth Management Jurisdictions
Here are a few of the jurisdictions that you might consider for both private banking and private wealth management.
Note: The order in which jurisdictions have been presented is alphabetical and does not reflect importance or ranking.
- Andorra
- Austria
- Bahamas
- Barbados
- Bermuda
- Cayman
- Guernsey
- Jersey
- Liechtenstein
- Luxembourg
- Monaco
- Singapore
- Switzerland
- United Arab Emirates
- United Kingdom
- United States
Private Banking Minimum Requirements
If you are interested in opening a private bank account or establishing a wealth management relationship in any of the jurisdictions listed above, prepare to deposit between US $500,000 and $3,000,000, depending on the country and the bank.
However, in most cases, minimum deposits can be negotiated if the bank (and banker) feel that you could be a valuable (read: profitable) client for the bank.
With this in mind, it’s always a good idea to understand the required minimums before going in. But, you don’t need to view those minimums as a hard and fast rule. They are often negotiable.
Ready to Open Accounts?
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