Question Private banking - 7/8 figures, white and safe

[Martin Everson]

At that amount, is private banking really worth, compared to using a regular bank account, and a regular brokerage account and, if you need support, paying an independent investment consultant to do investing?

Yes

What does private banking get you that is worth the extra costs?
I can imagine that private customers have a much easier way to get cheap $$$ using their assets as collateral. So let's say you are a DIY guy, would there be a DIY way to get a cheap loan offering assets as collateral outside private banking (but, possibly, inside your regular bank account, if needed)?
Other advantages of private banking, beside having the guy call you to tell how much in red your investments are?

See my post below post from March 2021:

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.

Their direct investment advice they give in my opinion useless if you know the basics of financial markets and products. But the advice I get on how to structure my wealth and where to book my assets etc for succession planning is invaluable. You do not get this with a broker. You cannot even send your portfolio to a thirdparty with a broker which you can do with a private bank. The fees they charge for all services from brokerage to custody etc are negotiable. You can ignore whatever they write on their website if you have more than $10m to invest.

 

[backpacker]

To the experts who have experience with private banking i start to have some doubts about it..
So let's say you have that money. the 7-8 figures
Let's round it to some 10M$ to paint a scenario that might include a few.
At that amount, is private banking really worth, compared to using a regular bank account, and a regular brokerage account and, if you need support, paying an independent investment consultant to do investing?
What does private banking get you that is worth the extra costs?
I can imagine that private customers have a much easier way to get cheap $$$ using their assets as collateral. So let's say you are a DIY guy, would there be a DIY way to get a cheap loan offering assets as collateral outside private banking (but, possibly, inside your regular bank account, if needed)?
Other advantages of private banking, beside having the guy call you to tell how much in red your investments are?

Valid points.
I would not recommend anybody to use a private bank for it's priced wealth management. Most multi-stategy mutual funds have a better performance.

However, for a DIY guy it can be attractive if he is able to negotiate the fees (not a difficult task). Since these negotiated fees will still be much higher than the ones of IB it will also let him think twice before placing a stock market order. Let's face it: Most people loose money with online discount brokers because the hop on every insane idea they read on investment websites. So, the higher fees do put a psychological barrier and may prevent excessive trading.
A relatively cheap loan from a private bank is certainly an interesting antspect. However, never speculate on credit! So, I would dismiss a loan as a "positive incentive" for placing your assetswwith a private bank.

A very often overlooked point are OTC bond trading fees (see above post #71 and #76). Plus their term deposit offerings: A selection of banks you can choose from (usually minimum A-rated) with negotiated higher interest rates than you will get as an individual from the same bank. The private bank takes a comminssion and books it with the other bank.

Of course, if it is just about trading stocks and derivatives than a private bank is not a good place to be.

 

[wheelspin]

Most multi-stategy mutual funds have a better performance.

are you sure? Compared to ETFs (World, all) most mutual funds do not outperform if it is your goal to outperform the market.

 

[Martin Everson]

Since these negotiated fees will still be much higher than the ones of IB it will also let him think twice before placing a stock market order.

Yup. If you don't have a buy and hold strategy and want to day trade the private banking is generally not a good choice for such people. They need to stick to discount brokers like IBKR etc.