Private banking encompasses highly personalised financial and banking services that are traditionally offered to High-Net-Worth Individuals (HNWIs) and their families. Traditionally, HNWIs have been defined as individuals with over $1m in investable assets. However, most Private Banks have distinct classifications of HNWIs depending on how it segments the market. For example, Very-High-Net-Worth Individuals (VHNWIs) can refer to those with over $5m in investable assets, while Ultra-High-Net-Worth Individuals (UHNWIs) could refer to those with over $30m in liquid assets.
Regardless of classification or segmentation, private banks aim to match the overall financial situation of such individuals and families with the most appropriate financial investment options or opportunities, either through advisory or discretionary portfolio/asset management.
Broadly, the type of services offered to clients of Private Banks can be divided into 2 categories: Asset Management and Financial Advice. A brief description of the specific services under each category is provided below.
Asset Allocation: The apportioning of a portfolio’s assets based on the client’s financial goals, risk tolerance and investment horizon.
Risk Management: The process of identifying and analysing the risks inherent in a specific investment or portfolio of investments, and mitigating or accepting those risks based on the investment objectives and risk tolerance of the client.
Protection and Growth of Assets: The provision of strategies that enable the growth of a client’s assets and the protection of those assets from creditors.
Investment Counselling: The provision of advice that balances the client’s investment goals with potential returns.
Market Analysis: The collection and analysis of market information to determine trends an investment signals.
Tax Counselling: The provision of tax advice to maximise income and assets.
Estate and Inheritance Planning: The process of anticipating and arranging for the disposal of a client’s estate, as well as strategies to eliminate administrative uncertainties and maximise the value of the estate.
Retirement Planning: The provision of solutions that maximise income after retirement.