How Are Private Banking And Wealth Management Different?

For any high net-worth person, managing wealth is the most crucial prerequisites. Such people often seek services from private wealth management companies which offer specialised financial solutions. These companies also hire financial experts who lend their expertise to clients, helping them invest in different instruments based on their financial objectives and risk appetites. People often believe that these wealth management services also offer private banking facilities.

However, that is not the case. Here are how both the concepts are different. We shall look at some points that explain the same.

Services offered

While both wealth management and private banking services have asset management as its core, the wealth management companies provide consultation and advisory services. Prominent facilities offered by the wealth management firms include investment planning, portfolio development, asset structuring, tax, retirement, and estate planning, among other things. On the other hand, privilege banking offers banking features like brokerage services, asset management facilities, and essential tax consultation.

Difference in approach

Both banks and private wealth service provides unique products for their HNI and ultra HNI clients. However, both entities have a vast difference in their approaches. Such high-profile clients are provided with customised one-to-one models, wherein the bank representative handles all the banking needs. Such services include doorstep cheque collection, cash deposits, specialised current and savings account with high balance requirement, high-interest rates, and overdraft and loan facilities.

Wealth managers tend to focus on offering financial advice and concerned about maintaining, collecting, conserving, and compounding wealth. These experts primarily monitor their client evolution and assist them in achieving personal and financial goals over the years.

Different in options

The other aspect to focus on wealth management and priority banking is the opportunities offered to the clients. Banks can provide their clients with only a limited number of specific products under their portfolio. There is little room for delivering a host of options for such clients. However, wealth management has the opportunity to leverage and implement tailored solutions. Here, the manager recommends many products from different institutions, thus enabling their clients to select from those which suit your requirement.

Relationship with clients

Building a relationship is considered a virtue in the field of wealth management and preferred banking as well. The wealth manager needs to understand not only the client’s financial goals and aspirations, along with concerns. The wealth manager also needs to work towards offering a financially peaceful and comfortable life for the clients and their family, during and after the client’s death.

As for private banking, bank representatives are more invested in forging a personal relationship with the client. The facilities offered also need little time since they are packaged. The products are adapted according to the high or low-risk appetite, keeping the client’s asset volume in mind.