Consider Private Banking as Your Specialized Financial Solution

I recently read an article on Financial Planner World which offered valuable information on Private Banking and its benefits. For clients curious about Private Banking, here are a few key points to consider:

What is Private Banking?

Private banking refers to a suite of services offered by a bank to high net worth individuals (HNWI) designed to grow wealth.  General wealth management strategies in banking and investment are reserved for HNWIs with at least $250,000 in liquid assets, however, many banks require at least $1,000,000 in liquid assets.  Clients with such considerable assets are more likely to be capable of utilizing financial solutions that require large investments like hedge funds and real estate. These services may also include specialized financing options, retirement planning, succession planning, and taxation solutions.

Although bank customers with assets topping $50,000 may be able to take advantage of some of these services, banks usually reserve private banking to individuals with the means to benefit from an array of specialized financial solutions.  The key benefit of private banking is the personalized service that comes from having an individual account manager.  This account manager is often available to the client and provides wealth management strategies that are customized to their situation.

It is not quite apt to define private banking as wealth management, because private banking generally offers a much narrower set of financial options.  A private banker offers strategies that can be applied to the assets the bank can access, while a more comprehensive wealth manager would develop broad strategies that include all of a client’s assets.

Benefits of Private Banking

Private banking is able to provide unique benefits to clients with substantial assets, and is often used to attract this class of clients to commercial banks.

Privacy—as the name implies, the services offered to the client remain largely confidential.  This anonymous approach has had the stigma of underhanded dealings in the past, but most modern banks prefer to keep their activities with exclusive clients unpublicized for a variety of reasons.  Many tax shelters that limit exposure to taxation may be utilized legally but may contribute to negative public opinion.  Furthermore, many of these strategies are proprietary and banks seek to limit their adoption by competitors.

One-on-one service—The assignment of a relationship or account manager to handle a client’s assets allows the client to have access to a mid-level to upper management official without having to go through the customer relations staff first.  This easy access minimizes any obstacles to providing input on investment or wealth management decisions and allows the bank to develop strategies that are unique to the client’s financial situation.

Discounted services—The considerable assets that a HNWI brings to a banking institution is often rewarded by the bank by providing services like tax preparation and planning, travelers checks, or corporate checking at discounted rates.  Many other services like real estate investments that may only be available to customers with considerable assets may be discounted through the use of personnel associated with the bank. Many of these services are often highly prioritized by the bank and are processed expeditiously.

High returns—Because banks devote highly trained staff and enormous resources to the management of HNWI accounts, most of these accounts receive returns on their investments that consistently outperform the market.  According to some reports, private banking can yield returns up to 30 percent annually, but range more typically from the 7 to 13 percent range.  This spectacular performance is often attributable to access to high return investment opportunities like hedge funds.

At Naden/Lean LLC, we work with a trusted network of bankers to manage your investments. For a list of recommended bankers that offer tailored banking strategies and solutions to your individual circumstances, contact me directly at 410-453-5500 or

About Bruce Caulk
websize 200x300 final Bruce Caulk nadenlean DSC_8017With over twenty years of experience in public accounting, Bruce offers his clients deep experience and sound guidance. Financial services include management use only, compilation and reviewed financial reporting services; finance; operation development; tax planning and strategy and preparation. In addition, Bruce serves many clients with specialized operational guidance, job costing analysis, surety and banking relationship management, and financial consulting related to both internal cash management and securing lending.
Member: AICPA, MACPA, American Subcontractors Association of Baltimore


For the full Financial Planner World article on Private Banking, visit