What is Private Banking? How It Works
Ever wonder where successful people do their banking? While there are a variety of choices, one popular option is private banking. Private banking is specially designed for high-net-worth individuals, who typically have more complex financial needs. So, what is private banking, why use it, and is it worth it? We'll answer these questions to help determine if private banking is right for you.
What is private banking?
Private banking is designed for both established individuals who have achieved success and the upwardly mobile—offering customizable products with a range of wealth management services. Financial institutions typically require clients to have balances in excess of $500,000 in deposits or investable assets to qualify for private banking.
Since clients have substantial deposit balances and investments, their banking requires more sophisticated services. In addition, private banking puts the client at the center to create solutions specially tailored to them.
With this client-centric approach, customers are given a dedicated account representative, sometimes known as a private banker or relationship manager, who handles all financial matters. The private banker works with a team of experts to manage all aspects of a client's portfolio to secure wealth and ensure growth.
Most private banks offer the following services:
- Personalized deposit solutions for checking, savings, and money market accounts
- Custom lending and credit strategies
- Wealth management
- Investment management
- Trust management
- Estate planning & settlement
- Tax and insurance services
- Business banking
So, how can you find a private bank? While some financial institutions exclusively offer private banking, most local and national banks have private banking divisions. FirstCapital Bank of Texas offers both Private Banking and Wealth Management to address our clients’ financial needs. In addition to the services above, FCB Texas also has expert-trained professionals to assist with asset management, including oil and gas mineral interests.
Why use private banking?
Private banking provides clients with convenience by addressing all their financial needs in one place. Additionally, since these individuals bring substantial deposits and assets to banks, they're rewarded with high-value benefits. As a result, many wealthy individuals opt for private banking to make the most of their relationship.
Benefits of private banking include:
- Concierge service from a dedicated representative with a network of specialists
- Discreet handling of financial matters
- Preferred pricing on deposit and loan rates
- Discounted charges
- Alternative investment options such as hedge funds
- Business benefits
Is private banking worth it?
Determining whether private banking is the right solution for you depends on many factors, including your portfolio's complexity and your financial goals. It's best to consider both short-term and long-term aspirations. By understanding your goals, you'll know which types of products and services will be most valuable to you when looking for a private bank. You should also consider whether any service and management fees could negate the benefits of the services received.
However, since private banking is a niche market with highly customizable products, it's best to consult with a private banker to determine if it's right for you. At FCB Texas, your dedicated Private Banker will work alongside a team of specialists to understand your needs and goals to build a banking experience tailored to you, your family and your business. Contact us to learn more.