Private Banking (sometimes also referred to as Premium Banking or Wealth Management Banking) is a service that banks offer to their most wealthy customers. Typically, there is an entry requirement that is based on a minimum level of salary or liquid assets. An example might be that the bank might require you to have an annual gross salary of 100,000 ($200,000) or liquid assets in excess of 200,000 ($400,000). Liquid assets usually means a combination of savings and shares but excludes the equity of your house.
The basic concept of Private Banking is that you are assigned a Private Banking relationship manager. The benefit of having a relationship manager, of course, is that rather than speaking to a spotty teenager, who doesn’t know your name or your account history, you are instead speaking to someone who should be familiar with your needs and empowered to make decisions.
The downside is that there is usually a fairly hefty subscription fee that is typically paid on a yearly basis.
Assuming that you are fortunate enough to qualify for your bank’s Private Banking service, the decision you need to make is whether the value you would get from it justifies the cost. This in turn probably depends on how hectic a lifestyle you have? If, for example, you are a senior exec in a multi-national company or run your own business, you may find that you simply don’t have time to waste on visiting your branch. Perhaps it would be better if you had a relationship manager who would be prepared to visit you at your office to go through that mortgage application for the summer home that you’re planning on buying?
As with the choice of any bank account or service, there can be value in shopping around to make sure you get the best deal. However, when we’re talking about such big money, service quality and the benefits that are included in the private banking package are probably more important than a few pounds or dollars difference in the yearly subscription fee. There can also be quite big differences in the criteria that various banks apply when deciding who qualifies for private banking, so if you don’t qualify for such a service with your own bank, you could still get it from a competitor.