Generating wealth can take a lifetime of hard work.
And having devoted so much time and passion to creating that wealth, new challenges arise. Such as how to maintain, build and pass that wealth on to future generations.
Rather than try to do this alone, many individuals and their families choose to partner with specialist financial institutions, including private banks and other wealth management professionals.
But what exactly do private banking and wealth management organizations do and who do they serve?
Wealth managers exist to help clients seek to preserve and grow their wealth. However, the ways they do this can vary a lot. Two wealth managers can offer different sets of services to equally diverse sets of clients.
That said, wealth managers typically offer a mix of some or all of the below:
- Investing:Helping clients create a long-term investment plan and then offering specific investments to put that plan into action
- Cash management:Offering deposits and other facilities for clients to seek a yield on their cash
- Lending:Enabling clients to borrow against assets such as their investment portfolios and real estate
- Wealth planning:Designing a plan and creating protective structures to help preserve assets and ultimately pass them on to the clients’ beneficiaries
Private banking is a variety of wealth management. Typically,private banks serve ultra-high net worth (UHNW) individuals–the wealthiest clients – and their family offices and companies.
Other wealth management services address high net worth (HNW) individuals and the affluent.
However, there aren’t any hard-and-fast definitions here. What can be called “private banking” at one institution might be labeled “private wealth management” or even simply “wealth management” at another.
Likewise, how much wealth you need to qualify as “ultra-high net worth” can vary from organization to organization.
For this article, therefore, we’ll use examples of private banking and other wealth management services at our organization, Citi Global Wealth.
Hopefully, though, this should still be useful for helping to understand the wider landscape and comparing institutions.
While private banking and other types of wealth management may offer the same services to help clients reach their financial goals, the degree of personalization is often different.
This starts with how a client accesses a wealth manager’s services.
Many wealth managers assign a dedicated relationship manager to each client.
The relationship manager’s role is to understand the client’s needs and then help them access suitable services.
With aCitigoldrelationship, for example, a Wealth Relationship Manager assists with each client’s personal banking needs, also connecting them with business banking, mortgage and other lending specialists, if needed.
The Wealth Relationship Manager works alongside aCiti Personal Wealth Management Wealth Advisor, who provides financial planning strategies and investing guidance.
Private banks, including private wealth managers, may offer even greater customization.
At Citi Private Bank, each relationship is managed through a Private Banker, who may serve as few as 20 clients.
The client also has a dedicated Investment Counselor, who provides personalized investment strategies based on a client’s investment objective, risk tolerance and liquidity needs.
The Private Banker partners with specialists in areas including but not limited to lending, financial planning, trust and wealth planning, and philanthropy to deliver the mix of services that address each client’s needs.
If the client wishes, their family members can also receive services, thus becoming part of the relationship.
For an eligible client who has family members, businesses and investments around the world, they can also have a dedicated private banking team ineach global regionwhere they desire one.
As we’ve seen, private banks, private wealth managers and other wealth managers frequently offer a similar set of services.
Again, though, private banking may come with enhanced possibilities.
Citi Private Bank, for example, offers suitable clients a broader range ofalternative investmentstrategies from private equity, hedge fund and real estate managers.
Clients of ourdiscretionaryinvestment management service can have direct access to a fully bespoke portfolios .
Ourcapital marketsteam offers guidance and execution on trading strategies across asset classes, with eligible clients receiving electronic trading and direct access to trading desks.
Likewise, private bank clients can requestbespoke analysisof their portfolios from a specialist team, who use proprietary modeling and tools.
When it comes to lending, many wealth managers enable clients to borrow against their investment portfolios and finance home purchases.
Additionally, Citi Private Bank offers financing forcommercial real estate,artcollections,private aircraftandsports franchises.
Private banks and private wealth managers may also provide specialist advice that other wealth managers do not.
This could mean strategies and dedicated service forfamily offices, assistance inpreparing clients’ heirsfor their future responsibilities and the highest level ofwealth planningincluding complex cross-border strategies.
Hopefully, this discussion of private banking vs wealth management should have given you an idea of which sort of wealth manager might be suitable for you.
Ultimately, this will probably come down to your level of wealth, your investment objectives and the sort of services you want to be able to access.
Whatever your level of wealth, though, it can be worth partnering with a suitable wealth manager.
Wealth definitely doesn’t take care of itself, and long experience has shown that taking a systematic approach is likelier to help you preserve and grow what you’ve worked so hard to create.
If you’d like to learn more about Citi Private Bank or Citi’s other wealth management services, please see “Become a client” at the top right of this screen.
