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Private Bank Vs Wealth Management for the Rich – PillarWM

The worlds of wealth management and private banking often overlap, sometimes to the extent that the terms private bank vs wealth management seem to become indistinguishable or interchangeable. Even though both services can help you manage and build your assets, they satisfy different requirements based on your unique financial needs.

So, naturally, you might have some questions such as, “Private bank vs wealth management – which one is better?” Do you have to choose between the two, or can you leverage the strength of both simultaneously? And if you want to go for a private bank vs wealth management, how do you pick the best bank, or in contrast, how do you pick the best wealth manager? If you have $10 million or more worth of liquid assets, we highly suggest you read our guide on choosing the best financial advisor.

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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.

Table of Contents
Private Banking and Wealth Management
Private Bank Vs Wealth Management – Which One is Better?
How Much Money Do You Need for Private Wealth Management?
The Bottom Line

At Pillar Wealth Management, we’re a team of independent wealth managers. We offer wealth management services to individuals and families who own between $5 million and $500 million worth of liquid investable assets. Plus, we have been catering to high net worth and ultra-high net worth individuals and families for a combined period of over six decades! We have expertise in developing comprehensive wealth plans to ensure that you’re able to meet all your financial goals and attain financial serenity. Click here to set up a free meeting with one of our wealth managers and move one step closer to reaching financial serenity.

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Private Banking Vs Wealth Management

Before we move ahead to analyze private banking vs wealth management, we need to understand both.

What Is Private Banking?

In simple words, a private bank is a financial institution that offers banking and financial services to affluent individuals. In some instances, an individual may be able to get these services if they have less than $100,000 worth of assets. However, most private banks set a criterion of a minimum of six figures. Private banking vs wealth management may also allow you to earn slightly higher interest rates, access additional benefits and services, and some personalized banking solutions.

Private Bank vs Wealth Management

What Is Wealth Management?

Wealth managers are financial advisors, and they usually serve clients who have a minimum net worth of $5 million. Wealth management firms are highly invested in managing their client’s investment portfolios and finances to help them improve their financial situation. Read this guide to learn about the paradigm shifts you need to make to get the highest possible portfolio performance.

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Private Bank Vs Wealth Management — 6 Key Differentiators

To answer some of the most commonly asked questions, such as “Which is the best, private banking or wealth management?”, we need to start by taking a deeper look at the differences between the two.

1. Expertise

Technically, considering a private bank vs wealth management, they provide similar services. Both institutions offer investment management, banking, retirement income planning, along with other financial and investment-related services. However, the difference exists in the expertise in those services.

Even though private banks do provide services such as risk management and retirement planning, they don’t have expertise in these fields. Instead, their primary expertise is in banking services.

On the other hand, wealth management firms have much more expertise and experience in these two services. Wealth managers are fully equipped with the knowledge of such services and have been offering them to affluent individuals for years, sometimes even decades.

All in all, if you’re managing your assets and wealth on your own or via some other financial advisor and just require specialized banking services, a private bank may be the right choice for you. However, if you need extensive wealth management, you need to opt for competent and experienced wealth managers. A wealth manager will allow you to achieve the maximized optimum performance. Read our guide, Improving Portfolio Performance, and find out how achieving the best investment performance can help you attain true financial security.

2. Services

As discussed earlier, private banking vs wealth management can also offer several services that wealth management firms usually provide. These include estate planning, financial planning, tax planning, and retirement planning.

However, this is where the limitations of private banking come forth and where wealth management outweighs it. For instance, you won’t always find all the services you need at a single bank. Some private banks may only provide estate planning services, whereas some might just offer retirement income planning. Using various banks to get various financial services will lower the efficiency of your wealth management process and hike your costs.

Contrarily, hiring a wealth manager will allow you to get all your investment and financial services from a single place. If you want to know more about how wealth management firms can help overcome the limitations of private banks, we recommend you place an order for a free copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million.

3. Client Base

When considering a private bank vs wealth management, it’s important to note that they work with a different set of clients. Wealth management firms generally offer their services to ultra-wealthy individuals and families who have at least $1 million worth of liquid assets. This is because high net worth and ultra-high net worth families usually need much more complicated services as they own a higher amount of wealth and assets that have to be strategically managed.

Alternatively, a private bank vs wealth management offers its services to everyone. Even if private banks do have some exclusivity standards, they have a significantly lower minimum wealth requirement of around six figures. This is one reason why a private bank vs wealth management doesn’t have much expertise in managing the wealth of affluent individuals.

4. Conflict of Interest

A private bank vs wealth management may often have a conflict of interest with their clients. Even though private banks do offer a range of services with an intention to assist their clients, they are more concerned about their own profits and shareholders. Thus, regarding recommendations or suggestions made by a private bank vs wealth management, they are more likely to be aimed at maximizing the bank’s profits rather than satisfying the client’s financial needs.

In contrast, wealth managers offer fiduciary services, which means they are obligated to always work in their client’s best interests. Fiduciary wealth managers are usually registered investment advisors (RIAs) authorized by the Securities and Exchange Commission (SEC). The SEC enforces a stringent code of ethics on fiduciary wealth managers to ensure they always work to benefit their clients rather than themselves, eliminating any possible conflict of interest.

Overall, wealth managers take decisions and offer recommendations that solely benefit their clients and invest all their efforts to serve their needs. To learn more about how a competent, private, fiduciary financial advisor can help to build, yet protect your wealth, read our ultimate guide to choosing the best financial advisor.

5. Dedicated Professional

Ultra-wealthy individuals require dedicated financial advisors who can fully comprehend and study their unique financial circumstances and goals and then recommend suitable strategies and solutions. This is only possible when the advisor establishes a good rapport with the client and diligently works on their case from the start. 

This isn’t usually possible in private banks, if you’re considering a private bank vs wealth management. Even though they do allocate a dedicated financial advisor or employee to fulfill your needs and requirements, they don’t stay for long. Due to the high turnover in private banks, the advisor assigned to you might leave that bank to pursue employment in another one. This means that you will have to take a fresh start with an absolutely new advisor, and the transition can be extremely inefficient and inconvenient. With wealth management firms, you can stay assured that your wealth manager will stay by your side from the day you hire them till even after you have passed away.

At Pillar Wealth Management, we have helped our valued clients successfully get through the 2008 Financial Crisis and are currently assisting them in managing their wealth during the COVID-19 pandemic. To start working with one of our wealth managers, click here to schedule a free meeting!

6. Freedom of Independence

Since private banking is a part of the overall bank, it has to adhere to the overarching banking procedure and regulations. Therefore, clients of a private bank vs wealth management are only provided the products in which the bank deals.

Wealth management firms are independent, unlike the private banking departments of established banks. Thus, wealth management firms can provide customized financial management and investment advice. This allows higher flexibility for clients and increased opportunities for wealth managers to provide a quality of service that is an accurate representation of clients’ needs and wants.

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Is It Worth Using A Private Bank Vs Wealth Management?

Now that you’ve learned about the role of a private bank vs wealth management, you might wonder is it worth using a private bank.

The biggest advantage of using a private bank vs wealth management is that it allows you to conduct all your banking-related tasks from a single place, including the less frequent but more important ones such as securing a mortgage. Moreover, with a dedicated baking assistant, you won’t have to repeat your preferences and situation every time you have some bank-related work.

Additionally, a private bank gives you greater privacy. And with an exclusive access to conducive discounts, rates, and higher interest rates on your money market, CD, and savings accounts, the perks and conveniences offered by a private bank vs wealth management may appear quite attractive to wealthy individuals.

Nevertheless, it would help if you also focused on the drawbacks of a private bank vs wealth management.

If you’re attracted by the option of taking advantage of wealth management services through a private bank, you will discover that private bankers have less proficiency in those areas. The best investment planning and money managing experts work as wealth managers, not as private bankers.

Hence, you won’t be getting the financial performance expertise that most high net worth individuals and families require. This limitation applies to all wealth management-related services such as retirement income planning, tax planning, estate planning, etc. Again, the best professionals in these fields don’t work at private banks.

Moreover, private banks also earn commissions from the products they sell to their clients, which means there can be a potential conflict of interest.

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The Final Verdict

In conclusion, you can opt for a private bank vs wealth management if you just want to upgrade your banking experience and benefit from some financial services that are only available to high net worth individuals.

However, if you need a comprehensive wealth management plan to secure and build your wealth, you should opt for an experienced wealth manager. To learn more on how investors with $10 million or more can choose the best financial advisor, click here to read our guide.

How Much Money Do You Need for Private Wealth Management?

Once you’re part of the millionaire club, you might wonder what’s the best time for you to hire a private bank vs wealth management. The answer to this question all depends on your existing net worth. If you do a quick Google search of “How much money do you need for private wealth management?” the results might give you answers that lie between $1 million and $5 million.

At Pillar Wealth Management, we provide exclusive services to individuals and families who own $5 million to $500 million worth of investable assets. Unlike other investment and wealth managers, we work with a limited number of clients. This allows us to ensure that we offer the kind of excellent service our clients need.

We don’t believe in offering standardized, cookie-cutter solutions to our clientele. Instead, we develop customized investment and wealth management plans that will help you achieve your financial goals. Sign up for a free meeting here to get more information about how our wealth managers can help you.

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The Bottom Line

Keep in mind that services of a private bank vs wealth management are different. While private banking is more of a procedural service, wealth management is a strategic partnership that helps you live your best life. At Pillar Wealth Management, we are a team of wealth managers offering a range of services at no additional cost, such as tax planning, investment management, risk management, etc. If you have any questions related to wealth management, feel free to speak to one of our wealth managers today!

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