If you earn a high income and have significant savings and investments, you might be looking for a better way to bank, with access to exclusive products and services. That’s where private banking comes in.
What is private banking?
Private banking is a type of banking designed for high-net worth individuals. You can find private banking options with high-street banks, as well as specialist online providers.
To qualify, you’ll usually need to meet specific criteria regarding your wealth, such as having several thousand pounds in savings and investments with the provider, and/or a large mortgage with the bank. You’ll often need to meet strict income requirements.
In return, you’ll get access to exclusive products and be assigned a dedicated relationship manager to provide a more tailored banking experience.
How is private banking different from other banking services?
The key difference is that private banking is bespoke. You’ll typically have at least one person working with you to help you better manage your money, achieve your financial goals and open the most suitable accounts. Many of these accounts will be exclusive to private banking customers, potentially with more generous rewards or lower fees.
What’s more, you’ll usually have access to financial, tax and estate planning advice – none of which you’d get with a traditional banking service.
What services can a private bank offer?
Some of the services you might be able to benefit from include:
Exclusive bank accounts, credit cards, unsecured lending, mortgages, savings accounts and multi-currency accounts
Advice on a range of investments, including special investment rates
Personal introductions to specialist partners, tax experts and financial advisers, including estate planning support
Wealth management services to help you protect and grow your wealth and assets
How do private banks differ from premier banks?
Private and premier banking are both more exclusive than standard, everyday banking. And some high street banks offer both premier and private banking services. However, the eligibility criteria for private banking is stricter than for premier banking, with their services aimed towards wealthier clients.
Although you will still need to have a high income to access premier banking, you won’t need to hold quite as much in savings and investments – say, £75,000 to £100,000 versus the £250,000 to £500,000 you might need for private banking.
Premier banking can still give you access to exclusive savings and bank accounts, plus rewards and other perks. These could include travel insurance, airport lounge access, breakdown cover and mobile phone insurance, although you will often need to pay a monthly fee for your account. But you won’t get the dedicated financial advice and support that you get with private banking.
Gives you access to exclusive accounts and rates, as well as alternative investments
Often includes financial advice, tax guidance and estate planning
All financial transactions and advice are confidential
Dedicated relationship manager means you'll have a single point of contact
Cons
Strict eligibility criteria
You may have to pay a fee for certain services – these aren't always transparent on the bank's website
Banks could prioritise their own interests over their clients, causing conflicts of interest
Financial advice is often less specialised
Bottom line
Private banking could suit you if you’re looking for bespoke banking services, access to exclusive rates and help with financial, tax and estate planning. However, you’ll need to meet the eligibility criteria, understand what fees are involved, and be aware that the advice you receive can be less comprehensive than you’d get if you approached a specialist in a particular area.
Sources
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Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time.
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