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Decoding the Myth of "Private Banking" ? Who needs and when ??

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azb1

Entrepreneur
First accept to apology for my ignorance in advance.
I am very confuse regarding the "Private Banking".
Basically who needs them and when ??

Like I have $25M Plus , If buy passive INDEX ETF in IBKR.
What is the problem with that?

Why some one needs Private banking ??
When ??

If you receive large some of money better to invest in any Index ETF?

What I am missing ?

Can anybody explain me in simple term what is the Myth of this "Private banking" ?
What exactly they do ? If you pay them custodian fee.



Thanks
 

John Spectre

Entrepreneur
Private banks firstly need for persons who operate with sums like 1mil+ on more or less daily basis.

Retail banks mostly are not fit good for it:
- managers in the branches are not experienced with such sums, will scare it from first hand, because they operate and deal with 'plebs' like clients.
- retail bank's manager will mostly don't hear you story about crypto, digital nomad lifestyle, residency change for tax optimisation, etc. Just kick you out) Private banks al least expect clients with similar amounts, expect that client could do some things for save his wealth and analyze if.

So its not like wrong or correct bank, just different branches for different purposes. This is like game rules.
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Why some one needs Private banking ??
When ??

Because they actually provide wealth management services which contains assets protection, inheritance planning, white label fund creation, life insurance wrappers, offshore structures, trusts etc. This on going advice is worth something. You can also get personal access to some of the best fund managers at investment events they organise and also client networking events. You also get preferential access on IPO's etc as many of these banks are the book runners for the IPO. If you have offshore companies they will take these and in fact offer you them as part of wealth planning. Btw I bank with every name you mentioned except DBS.

Taken from one of my other posts here.

Try deposting $25m in a retail bank and then telling them some month later "I am thinking of how to pass some of this money to my kids" or " I want to protect this money from litigation". They will reply "we can't hep you with that". A private bank can provide you solutions or link you with trusted thirdparties who can help you.
 
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jjrapy

Mentor Group Gold
Time.
When you have that much and you’re still working or taking care a of a big business i think my time is the most valuable thing.
Why would I care in open an account, make the transactions and so on?
Just pay someone to do the things, keep and eye on your statements and continue growing the business or enjoying life in case is a retired person.
Do you think UHNI will be with their cellphones buying ETFs, funding their account, etc?
When they could be in a business meeting closing a million dollars deal.

And also taking in account what Martin says, those are by far a more time consuming process.
 

BlueMist

Entrepreneur
Taken from one of my other posts here.

Try deposting $25m in a retail bank and then telling them some month later "I am thinking of how to pass some of this money to my kids" or " I want to protect this money from litigation". They will reply "we can't hep you with that". A private bank can provide you solutions or link you with trusted thirdparties who can help you.
Shouldn't this be handled by independent local lawyers anyway? It reminds of the RSA bank Nedbank that you were recommending as all in one solution. This recommendation felt in line with one of the All Inclusive experiences I had at the hotel resort. Although it sounded as All Inclusive, if you wanted premium you had to pay for it anyway.

One of the question to Nedbank (after clearly mentioning in the same email of being UAE resident living in Dubai, EU citizen - provided them my country):
"Where would be the account be domiciled as I have noticed 3 jurisdictions?
Response: That is entirely up to you and your circumstances. If you are unsure what effect opening an account in those jurisdictions has on your tax status we would of course always recommend seeking the advice of an independent tax consultant."


If they can't help UAE resident living in Dubai in a tax free jurisdiction by answering like that, I don't know if I want them to handle my family wealth planning. Since I provided my citizenship too, I would have expected a better sounding response.

From their website:
"We work with clients across the world. Our international presence, knowledge of local regulations and extensive experience allows us to support clients with complex multi-jurisdictional challenges, as well as those based in our home locations of the UK, Isle of Man, Jersey and the United Arab Emirates."
 
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