A Private Bank refers to a banking and financial institution that provides banking, investment and financial products and services to individuals who enjoy high levels of income (usually in the hundreds of thousands of dollars to millions of dollars) or have significant assets to invest / manage.

The “private” in a Private bank refers to delivery of personalized banking services that are usually not available to retail customers. Here, we will look at some important factors to consider before you choose to take your custom to a particular private bank:

1. The right jurisdiction

Your private banking jurisdiction should have certain important features:

▪ Zero / low rates of direct and indirect taxes (whether on income, capital gains, assets, transactions, consumption or otherwise).

▪ Greater levels of privacy and customer data confidentiality.

▪ A history of political, economic and regulatory stability including stable tax and inheritance structures.

▪ An established pool of private bankers, wealth managers and legal and financial specialists and service providers who have experience catering to the needs (including international needs) of high net individuals.

2. Services and products on offer

Your private bank should be able to offer you a suite of products and services that can help you effectively and efficiently manage your international holdings, optimize your tax outgoings, protect your assets from creditors, estranged spouses or other family members, achieve orderly, controlled and structured transfer of assets to younger generations of your family and ensure continued ownership of businesses without fragmentation between multiple owners.

Apart from a range of global legal, advisory and support services, your private bank should be able to provide multicurrency savings and investments including investment products that may not be available in your country to help you grow your wealth, easy, worldwide access to money, access to international markets, exchanges and instruments, personalized debt products, specialists to help structure investments and a relationship manager if you require a more hands-on approach from your bank etc and for that personal touch.

3. Fee structure

Your private bank may charge you fees on a flat fee model; this could be a percentage like one percent of your total assets under management. This fee covers all transactional, custody and advisory costs. Alternatively, there may be different fee structures for different products; under this model, advisory, discretionary management services and managed funds may charge the highest fees. You should take the time to understand your bank’s fee structure in detail including going through all bank documents. Also, get your private banker to explain the fees applicable to you.

4. Global availability

Determine the global availability and accessibility of your private bank’s products and services through the following questions:

▪ Do you have access to global markets and a global range of products and services (depending upon your country’s regulations)?

▪ Do the private bank’s products (debit cards, credit cards etc) have global validity and acceptance?

▪ Do you get world-wide product and customer support?

▪ How about “anytime” transactional access to your bank account from anywhere across the globe?

5. Security

Digital banking service channels like Internet banking and mobile banking have given banking “anytime, anywhere” convenience. They are not without risks, though. For a peaceful online banking experience, check whether your private bank offers a slew of security measures like:

▪ Multiple security layers that include the use of login usernames and passwords, security devices, instantly generated passcodes that are delivered through SMS or email etc.

▪ Application of additional security layers to all financial and important non-financial transactions.

▪ Instant alerts through SMS / email on execution of a wide variety of financial and non-financial transactions.