Private Banking vs Wealth Management: The Difference

We’ve discussed private banking vs wealth management in past articles. But, in this article, we’ll be simplifying the difference between these two areas of finance for you.

Importantly, this will apply whether you are looking to establish a relationship with a standard private bank or with one of the most exclusive private banks in the world.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. Private Banking vs Wealth Management 
  2. Difference Between Private Banking & Wealth Management
  3. Frequently Asked Questions
  4. Ready to Explore Your Options?

Private Banking vs Wealth Management

The main difference between private banking and wealth management is that private banking involves investing a portion of a person’s financial assets while wealth management consists of managing all areas of an individual’s financial life. That said, many banks, bankers, and private wealth managers blend these two terms and are often confused about the differences themselves.

We’ll take a closer look at the specific services that fall into both categories below.

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Difference Between Private Banking & Wealth Management

In this section, we’ll take a closer look at the specific services offered through private banking and wealth management. We’ll also discuss the level of privacy that you can expect when engaging private banks and why this has changed.

Private Banking Services

Private banking typically refers to opening a bank account and investing a portion of the account balance through the bank.

  • Banking relationships
  • Investment management

That said, there is also an expectation that private banking comes with a level of privacy. While this used to be true, the level of available privacy today comes down to the specific reporting requirements that banks abide by.

For example, Common Reporting Standards (CRS), Automatic Exchange of Information (AEOI), and the Foreign Account Tax Compliance Act (FATCA) all require that account information is shared with an account holder’s country of residence and/or citizenship.

In other words, private banking doesn’t really mean private anymore.

Wealth Management Services

Wealth management services extend to all aspects of an individual’s financial life, including:

  • Banking relationships
  • Investment management
  • Portfolio management
  • Real estate acquisitions
  • Tax efficiency planning
  • Inheritance planning
  • Retirement planning
  • And more

Frequently Asked Questions

Below are two of the most common questions that we receive from people looking to understand the difference between private banking and wealth management. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.

Is Private Banking the Same as Wealth Management?

No, private banking is not the same as wealth management. Instead, private banking relates to investing a fixed amount of financial assets while wealth management involves all aspects of a client’s financial well-being. In other words, private banking is limited to opening bank accounts and managing investments while wealth management can involve tax planning, inheritance planning, real estate acquisitions, liquidity events, investments, banking, and much more.

Is a Private Bank Worth It?

Whether opening an account at a private bank is worth it will depend on the specific services that an individual requires, how they plan to benefit from the relationship, and whether the private bank they are considering offers the services and benefits they need. Additionally, it’s important to note that all private banks are different. Likewise, while certain countries specialize in private banking, many more claim to be home to private banks but fall short in terms of service and benefits.

Ready to Explore Your Options?

If you would like assistance navigating your banking options at home or abroad, we can help.

You can access GlobalBanks IQ, our international banking intelligence platform, in just a few clicks. Unlock our bank database, individual bank profiles, account opening strategies and reports, banker scripts, and more.

But, if you want a 100% personalized account opening service that taps into our team’s expertise and provides direct banker introductions, you can get started with GlobalBanks Insider.

Of course, if you have any questions, please contact us directly.

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