Private Banking vs Wealth Management

hutch x chris   by Hutch Ashoo and Chris Snyder · Updated November 2, 2021 · 8 min read ✦

private banking vs wealth management

How is wealth management different from private banking? Do you have to choose between these, or can you utilize the strengths of both at the same time? And for those of you with $5+ million in investable liquid assets we recommend you download this in-depth guide to learn much more!

Book about how holistic high net worth wealth management services should feel to you. As a high net worth family you deserve more and you’ll see how the process differs greatly from that of private banking and big Wall Street firms in our published book “7 Secrets To High Net Worth Investment Management, Estate, Tax, and Financial Planning”.


If you have over $10 million in liquid assets, then we strongly recommend reading our guide on how to find the best financial advisor for managing your wealth.

Let’s consider private banking vs wealth management.

At its core, the question of private banking vs wealth management is a question of purpose. Each serves a different purpose as you’ll see in a bit. Many people therefore use both wealth management and private banking at the same time.

We’ll begin with the ‘nutshell’ explanation of private banking vs wealth management. If you need more detail, you can continue reading further. Or you can reach out to Pillar Wealth Management to start a conversation with a high net worth wealth manager that exclusively serves clients who have between $5 million and $500 million in liquid net assets. They can differentiate private banking vs wealth management for you.

private banking minimum requirements

The simple explanation is this:

To distinguish private banking vs wealth management, typically, wealth management focuses on your long term financial security. A wealth manager seeks to provide that by developing a plan that incorporates all aspects of your financial affairs, including investments and money management but also including estate planning, tax minimization, real estate, business, company stock, retirement, and the fulfillment of your lifelong dreams and ambitions. It is all-encompassing and if you’re working with the best wealth managers, it will be customized to your specific life situation, goals, and needs.

Private banking vs wealth management, on the other hand, offers the same services you would expect to see at a bank and can include investment and other services if you want to access them, but at a much more limited level than wealth management.

Simply put, when looking at private banking vs wealth management, private banking is a service, and wealth management is a partnership.

So, if you want to enhance your banking experience and access various exclusive financial services reserved for high net worth individuals, private banking is the usual path for pursuing this.

If you’re looking for focused attention on your investment plan, portfolio, and the achievement of your other financial and lifestyle goals, then you want to look for a wealth management firm such as Pillar, which serves ultra high net worth clients across the nation.

That’s the short explanation for private banking vs wealth management. If you need more – keep going.

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At both a private bank and a wealth management firm, you will get financial management services; however, a wealth management firm does not provide banking services, such as checking accounts.

Wealth management includes the same financial planning and investment services as an investment bank, without the usual banking services such as savings and checking accounts.

A private banker may offer the same services as a financial advisor, such as investment and retirement planning, but working at a bank means they can offer banking services as well.

Private banks often offer additional services and exclusive features to high and ultra-high-net-worth individuals. Investment bankers work with large companies as high-level analysts and consultants.

Private banking is worth it for the very wealthy, who happily pay a fee for the attention of a personal manager, who can handle banking transactions and also provide investment advice and planning.

A private banking account could require a minimum of $250,000. As a client, you would pay a monthly fee to have access to a personal manager who will manage your banking transactions and loans.

The minimum for a wealth manager would be to have at least $250,000 in ready assets, although many firms require at least $1 million. With less than $250,000, you can probably manage on your own.

Private banks offer banking and financial services to high and ultra-high net worth individuals and families. They offer a dedicated wealth manager to provide financial planning and investment advice.

In addition to their traditional banking services, banks will offer wealth management for their wealthy clients, including financial planning and asset management.

High-net-worth banking, or private banking, is available to high-net-worth individuals who seek personalized banking services (for a fee). Many banks offer private banking services.

8 Differences Between Private Banking and Wealth Management

8 Differences Between Private Banking and Wealth Management

  1. What is high net worth private banking?
  2. Pros and Cons of Private Banking
  3. What is Wealth Management?
  4. Are All Wealth Managers Basically the Same?
  5. How Do Wealth Managers Work?
  6. What Other Services Do Wealth Managers Offer?
  7. Is It Worth Paying a Wealth Manager?
  8. The Final Word on Private Banking vs Wealth Management
high net worth private banking

1. What is high net worth private banking?

For high net worth individuals and families, private banking offers all the same services as a bank. It will also provide investment management but at a more limited level than a wealth management firm. Private banking vs wealth management is essentially like regular banking but on steroids, to use the common expression.

You still get savings, checking, and CD accounts, but you get served by a personal banking representative who you can reach by phone without having to sift through all the usual channels.

You’ll also probably earn slightly higher interest rates, access to additional perks and services, and probably some customized banking solutions.

Private banking vs wealth management enables you to do the usual mundane processes such as bill paying, the use of safe deposit boxes, setting up mortgages, and all the rest. And, you’ll likely pay lower fees (or none at all), get access to special lines of credit and exclusive loan terms, and receive prime rates. If you own a business that imports or exports, you may receive discounted foreign exchange rates.

private banking services

So, if you are a high net worth individual and want a banking experience that reflects the greater value your patronage represents, you might want to look into private banking vs wealth management.

Now, private banking vs wealth management can also include many of the services that are typically offered by wealth management firms. These include retirement planning, estate planning, tax planning, and financial planning.

However, this is where private banking’s limitations emerge, and where wealth management supersedes it in what it can offer you. More on private banking vs wealth management in a bit.

Here’s another summary of services typically offered through private banking.

If you are interested in finding out how wealth managers help overcome these limitations, we suggest you order a free copy of our book, 7 Secrets To High Net Worth Investment Management, Estate, Tax, and Financial Planning – Strategies For Families Worth $25 Million To $500 Million. It will also clarify for you the details of private banking vs wealth management.

high net worth banking

2. Pros and Cons of Private Banking

The single best advantage of private banking vs wealth management is that you can do all your banking tasks in one place, including the less common but more consequential ones like securing a mortgage. And with a dedicated banking employee working with you, you get to talk to the same person every time.

Private banking vs wealth management also affords you increased privacy. And with the special access to favorable rates, discounts, and higher interest rates on your savings, money market, and CD accounts, the conveniences, and perks offered by private banking look pretty attractive to a high net worth individual.

However, consider the limitations of private banking vs wealth management.

If you’re lured by the option of also accessing wealth management services through private banking, you’ll find considerably less expertise in those areas at your bank. The top money management and investment planning experts do not work in private banking. They work as wealth managers. They don’t want to spend their time helping clients pay bills and set up CDs.

private wealth banking

So, you will not be benefitting from the financial performance expertise that most high net worth individuals need. This shortcoming extends to any related services such as estate planning, retirement planning, and tax planning. Again, top experts in these specialties do not work at private banks or any financial institutions. This is a major difference between private banking vs wealth management.

For this reason, private banking departments experience higher turnover. Those private bankers who want to get into money management will jump at it when the opportunity arises. So, your best private bankers will be continually departing for greater opportunities.

Also, private bankers are not fiduciaries. Though they may offer personalized service, they also serve their bank’s goals and follow their bank’s procedures. So, the financial performance of private banking clients is not their number one priority or best interest — another critical difference between private banking vs wealth management.

To learn more about how this can hurt your investment goals, click here to read our book 7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning.

Here’s a quick summary of private banking vs wealth management:

Pros of Private Banking:

One-stop personalized bankingOne-stop personalized banking
Dedicated banking employees, bypassing usual channels of serviceDedicated banking employees, bypassing usual channels of service
Increased privacyIncreased privacy
Better rates, terms, perks, and optionsBetter rates, terms, perks, and options
Exclusive access to opportunitiesExclusive access to opportunities

Cons of Private Banking:

Less wealth management expertiseLess wealth management expertise
High turnover and churn of best bankersHigh turnover and churn of best bankers
Not fiduciaries, possible conflicts of interestNot fiduciaries, possible conflicts of interest
Increased regulations since 2008 making it harder to certify new bankersIncreased regulations since 2008 making it harder to certify new bankers

If you are interested in learning more about this, click here to speak to one of our wealth managers today. They are experts when it comes to the fine points of private banking vs wealth management.

benefits of private banking

3. What is Wealth Management?

When looking at private banking vs wealth management, in contrast to private banking, wealth management firms don’t offer typical banking services. We are different from private banks. You don’t deposit money, or get checking accounts, or set up CDs, or get mortgages through a wealth management firm.

Wealth management advisors devote their efforts to stewarding your finances and investment portfolio to help you optimize your wealth and improve your financial plan.

A wealth expert is a person you’ll collaborate with to invest your liquid assets. This should encompass three main categories: Equities, bond investments, and cash accounts like savings, certificates of deposit, and money markets. It can also include real estate and commodities, but the core focus typically includes some combination of money, bonds, and equities.

Wealth managers are a specialized version of financial advisors, in that they typically serve only with high net worth or ultra-high net worth clients.

private banker vs financial advisor

4. Are All Wealth Managers Basically the Same?

No. As in any profession, you may find some people doing what they’ve been taught to do either at school or at a previous firm, and you will find others who have developed their own investment planning processes and systems based on years of experience and concern for their clients.

Pillar falls into this second category.

If you need advice in finding the very best wealth expert or financial advisor for you (and it might not be Pillar), we created a free eBook 7 secrets, with a special chapter dedicated to the process of finding a financial advisor. This book will also explain the intricacies of private banking vs wealth management.

This unparalleled resource will walk you through the seven warning signs that you might be talking with an advisor who will fail to reduce your anxiety or uncertainty about your financial future. You’ll also discover the five (and only five!) areas of financial planning under your control, and why it’s so important to know what they are.

You’ll see examples of real clients who have risen and fallen based on the wealth management and financial advice they received.

For high net worth clients, in particular, you’ll learn the five non-negotiable qualities you must demand from whichever wealth expert you decide to work with.

Packed with data, examples from history, and surprising revelations about the hidden costs some wealth managers (and private bankers) won’t tell you about, you’ll also learn the truth about risk tolerance, the shortcomings of trying to actively manage all your investments, and so much more.

It’s a complete guide to finding a financial advisor or wealth manager.

Get your free Ultimate Guide here

wells fargo private bank minimum

5. How Do Wealth Managers Work?

For Pillar, we provide a free Wealth Management Analysis for our clients, which you can schedule here.

Here, we’ll use your lifestyle goals and dreams, financial needs, and current family and work circumstances to create a highly customized service. But please note: We only work with high net worth individuals with over $5 million in liquid assets.

Get more details here about the holistic wealth management services provided by Pillar, and how our process differs greatly from that of big private banks as well as most other wealth managers.

You can talk to one of our wealth managers in a free consultation session and get all the information you need.

difference between wealth management and private banking

6. What Other Services Do Wealth Managers Offer?

This is actually one area with a lot of variation. Not all wealth managers offer the same additional services. Some focus exclusively on managing your portfolio and investments.

Pillar also offers many other services that high net worth clients need help with at critical moments of their lives, including:

Tax accounting and strategic planningTax accounting and strategic planning
Retirement planningRetirement planning
Legal planningLegal planning
Estate planningEstate planning
Risk managementRisk management
Trust servicesTrust services
Banking servicesBanking services
Philanthropic planningPhilanthropic planning

These services come at no extra cost to our clients. Reach out to Pillar to schedule a free, no-strings-attached conversation about your financial goals.

private banking minimum requirements

7. Is It Worth Paying a Wealth Manager?

If you have high or ultra high net worth and want to have comprehensive financial services like we’ve described, hiring a wealth manager is the way to get them. However, before you decide to hire a professional advisor, there are some aspects that you need to take into consideration.

The first thing is the minimum asset requirement. Hiring a wealth advisor is not merely opening an account and asking for wealth management. Some companies ask you to have at least $250,000 or more when opening an account. Pillar Wealth Management has a $5 million minimum.

There are at least 10 questions to ask any wealth manager before you work with them. See all 10 questions and the answers you want to hear.

Learn more about what wealth management is and how to find the right firm.

If you want to learn how wealth management helps with portfolio performance, click here to read our guide on the subject.

chase private client

8. The Final Word on Private Banking vs Wealth Management

Some private banks offer services to “wealth management private banking clients.” By mixing these terms together, they are sowing confusion and clouding the very stark differences between wealth management and private banking.

Private banking is procedural; wealth management is strategic.

One is a service. One is a partnership, forged to help you live your life in the best possible way, secure your future, and protect your wealth. They are not in opposition. They are complementary services serving distinct needs.

What are private banking and wealth management?

Financial institutions and banks that seek out wealthy individuals with the goal of managing their assets are said to be involved in private banking. Simply put, private banking means that the client is treated preferentially in regards to banking services. The bank will also offer investment advice, retirement planning, and tax planning. In exchange, the bank may require the clients to have at least $250,000 in investable assets.

These banking clients have direct access to their bank representative whenever they need banking services. The bank will cater to their wealthy clients’ needs because they can earn more money with wealthy clients, such as the interest earned on a much larger mortgage. The bank will often employ staff who are dedicated to serving their high net worth or ultra-high net worth clients.

Both wealth management and private banking include asset management services. High net worth and ultra-high net worth individuals have assets valued in the millions of dollars, so the wealth manager or private bank can benefit from the fees they can charge for their services, which are usually based on the value of the assets managed for the client. However, banks may not have the expertise of a wealth manager, who is not concerned with banking and can act independently regarding their services.

Unlike in private banking, wealth managers cannot provide the usual banking services such as cashing a check or making checking or savings accounts deposits or withdrawals.

UHNW private banking

Private banking for ultra-high net worth (UHNW) customers not only provides personalized banking services, but it also offers advantageous financing, financial planning and wealth management for investors, with the help of a personal manager. Wealthy clients are happy to pay the monthly fee for these personalized wealth management services.

A private bank can offer advantages such as higher interest rates on accounts with a high balance. It can offer loans that would not be available to ordinary bank customers. Private banking clients will be assigned a bank representative who will be available at all times to fulfill banking transactions as well as provide asset management and other financial services that are specifically tailored to wealthy individuals.

Some UHNW individuals may want to diversify and work with more than one private bank, largely due to the fact that not all banks are alike. There services will differ, and using multiple banks allows the client to take advantage of those differences. However, managing several accounts at multiple banks does take time and effort. A family office is a firm that can manage these accounts and monitor their performance. A family office will typically work with one or only a small number of UHNW individuals and families.

ultra high net worth financial advisors

When you try to mix wealth management and private banking, you may end up with a vastly diluted quality of service in your wealth management, and your confidence in your future will be strained and uncertain. Your best advice is to use these complimentary services for the purposes they were created for.

Click here to arrange a free consultation session and learn more about the benefits of having a dedicated wealth manager on your team.

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.

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.

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