Private Banks for Wealth Management Services: Yay or Nay?

So, you have managed to grow your wealth to $5 million to $500 million worth of liquid assets. This can be a large amount of wealth to manage on your own. Not to mention all the risks you would be taking due to your limited time or knowledge. As a result, you may decide to go with private banks for wealth management services. However, this is again a big risk. Private banks are great for banking services but not necessarily as great for the wealth management services that high and ultra-high-net-worth individuals require. So, if you really want to grow your wealth further, sustain your financial position till retirement and protect all your assets, you need to reconsider your decision to work with private banks. For more clarity, we suggest requesting a copy of our book, 7 Secrets to High Net Worth Investment Management, Estate, Tax, and Financial Planning, where we outline the unique and complex needs of high-net-worth individuals and what they need to achieve financial success.

STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION

7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning

The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.

Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.

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If you are specifically searching for wealth management services, Pillar Wealth Management is one of the best options out there. Our private firm has been offering a comprehensive list of wealth management services for more than a couple of decades. Our holistic services include financial planning, investment management, estate planning, retirement planning, risk management, tax planning, and much more. We strictly work on a 100% fee-only basis as we truly believe in helping our affluent clients reach their top financial potential. Our fiduciary financial advisors are always looking out for your best interests through a range of services, personalized solutions, constant support and guidance, and much more. You can reach out to us by booking a free meeting with Pillar Wealth Management today.

In this blog, we’ll be covering what private banks do, why private banks may not be the best option, and why you should choose a suitable wealth management firm instead. Let’s get started.

Table of Contents
Private Banks Private Banks Vs. Wealth Management Firms Final Words

Private Banks

When it comes to the financial needs of high-net-worth individuals, there are several financial institutions out there. There are investment houses, brokerage firms, and many others. However, many affluent individuals looking for wealth management services tend to wonder, are their any private banks?

People assume that since banks are so experienced with handling money, they must be the best at handling and growing the wealth of the rich. However, this is not necessarily true. Here’s what high-net-worth individuals need to know about private banks.

What Do Private Banks Do?

Like most commercial banks, private banks offer a wide range of financial services for clients. However, unlike commercial banks, private banks tend to cater to a different group of clients, i.e., a more wealthy class of clients.

They offer more personalized banking services with personal advisors always available to take care of your needs. Along with the typical banking services, though, you also have access to additional financial services. For instance, some private banks can offer investment advisory and management services as well to help clients grow their wealth.

Some private banks can offer tax planning services along with that as well as other services such as estate planning or retirement planning. Other than these services, private banks can also offer other benefits, such as invitations to exclusive events.

Who Qualifies to Hire Private Banking?

So, who qualifies to hire private banking services? Well, different private banks can have different requirements. Some can set the limit at $500,000, while some may restrict their clients to high-net-worth individuals only.

Usually, most private banks require prospective clients to have a net worth of at least $100,000. Therefore, if you plan to work with a private bank, you will need at least that much. Besides that, if you have a large amount of wealth and are struggling to manage it all on your own or don’t prefer dealing with commercial banks, then also you may qualify to hire a private bank.

Private Banks Vs. Wealth Management Firms

If all that has you convinced that you need to work with a private bank only and you are already wondering, which private banking is the best? Then, hold on for just a minute. Private banking may seem like the best option, but as a high-net-worth individual, there are better options out there as well.

For instance, private wealth management firms. These firms, as their name suggests, focus primarily on wealth management services. This includes almost all aspects of your wealth and encompasses a wide range of financial planning and financial advisory services.

So, which one is better for high-net-worth individuals? Keep reading and decide for yourself.

Services

The services are the first thing you need to consider. As a high-net-worth individual with a considerable amount of wealth, you need a comprehensive list of services to manage your wealth efficiently. For instance, imagine you are using investment management services from a private bank.

For almost every investment decision you take, there will be certain tax implications. So, if you plan for those tax bills side by side, you could end up losing a major portion of your investment returns to taxes only.

This will not only make your investment strategy ineffective but also take you further away from reaching your goals. Therefore, you need to work with an organization that offers all necessary financial services. Usually, this is a private wealth management firm.

Private banks tend to offer limited services such as investment management only or financial planning, or sometimes retirement planning. As a result, you would have to hire several other advisors to cover all your needs which is not a great option.Learn about all the financial services you can get at Pillar Wealth Management by arranging a free conversation with us.

Customization

Another area where private banks tend to fall behind is customization. This is super important for affluent individuals and, more specifically, for helping them achieve financial success. Usually, when you work with private banks, they will certainly ask about your risk tolerance and desired rate of returns.

However, that’s not enough to create a fully customized and targeted financial plan. So, they will offer you generic, fixed investment plans which have been proven to be profitable and safe for the bank in the past.

These plans will have nothing to do with your personal goals, and therefore, they will not be effective in helping you reach them. Wealth management firms carefully consider your entire situation and really try to understand your priorities and aspirations in life.

They then develop personalized plans based on that. Read our comprehensive and illuminating guide on portfolio performance to see how personalized plans can affect your performance and financial success.

Expertise

When you choose to work with a third party to help manage your wealth, you are essentially risking your $5 million to $500 million worth of assets. Therefore, you want to be sure that your advisor really knows what they are doing and are experts at it.

For wealth management services specifically, it’s pretty obvious where the experts are. Private banks are experts at banking services, even if they offer other financial services. Similarly, wealth management firms are experts at wealth management services since that is their entire job. Schedule a quick chat with our expert wealth managers over at Pillar Wealth Management today.

Management Style

Another factor you need to consider is the management style, as this can directly impact your taxes, costs, risk factor, etc., which can then affect your financial health as well. Most advisors at private banks tend to adopt an active management style, which involves timing the market and going after hot buys.

While this can help bring in high returns in the short run, it also comes with a lot of costs, risks, and high tax bills due to a large number of transactions within the year. In comparison, there’s the passive management style which has a more long-term approach and follows the market index. While it may have lower returns in the short run, this style results in lower costs and taxes as well, which ultimately proves to be more profitable in the long run.

That’s why wealth managers try to employ both styles in an optimal manner in their wealth management strategy to get you the best of both worlds. Check out our practical guide on portfolio growth strategies to see how exactly the numbers add up for both management styles.

Fiduciary Services

You also want to be able to trust your advisor, and that’s why you need fiduciary services.Fiduciary financial advisors, such as those at wealth management firms, follow a much stricter standard of care where they are obligated to look after their clients’ best interests.

They have to disclose all relevant information always, including any potential conflicts of interest. They always act in good faith so you can trust them to make the right financial decisions for you. On the other hand, private banks and their advisors are not held to the same obligations. In their case, they are looking out for the bank’s interest instead and not yours.

As a result, they can be risky to work with. Read a copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 million to $500 million, to discover how you could be risking your wealth and how to protect it.

Dedicated Advisor

A common problem in banks is the high turnover rate. Employees often leave for other banks for many reasons. Therefore, you may suddenly find yourself working with a new advisor quite frequently. This will make it hard to establish any kind of relationship with the bank, and there could be miscommunication which could lead to some bad financial decisions.

In the case of private wealth management firms, they usually have financial advisors that have been working with them for many decades. Therefore, the advisor you choose on your first day will remain your advisor till the very end. You will have a fully committed and dedicated advisor who will be completely familiar with your case and your financial position.

Request and read a copy of our book, 7 Secrets to High Net Worth Investment Management, Estate, Tax, and Financial Planning, to learn about some of the other factors you need to look for in an unbiased and qualified financial advisor for yourself.

Final Words

For high-net-worth individuals with $5 million to $500 million in liquid assets, it is certainly not a wise choice to try and manage their wealth all their own. With their limited expertise, they would only put their financial position at risk. On the other hand, they can’t just work with anyone either. They have to choose the right kind of financial institution to work with and then the best firm for themselves.

One such firm is Pillar Wealth Management. We have been dealing with high-net-worth and ultra-high-net-worth individuals and families for more than thirty years now. So, affluent individuals can rest assured with the fact that we know what we’re doing, and their wealth will be in good hands. We are quite experienced with the complex challenges faced by affluent individuals and try our best to come up with personalized, targeted, and efficient solutions for them. Our financial advisors only work with a small number of affluent clients every year so that we can provide each client with the full attention and dedication they deserve. Line up a free meeting with Pillar Wealth Management today to start working with our wealth managers.

Authors

Hutch Ashoo

Chris Snyder

To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.