From personalised service to tailored advice and unique opportunities there are a lot of reasons to consider private banking, but is it right for you? Rescu. asked Ralf Haase, head of the Commonwealth Private Office, to tell us everything you need to know about private banking.
RESCU: What is private banking and who is eligible to get it?
Ralf Haase: Private Banking is a generally accepted term for financial services provided to High Net Worth (HNW) and Ultra High Net Worth (UHNW) individuals. There are a number of definitions, but generally speaking HNW have investable assets of more than $1 million and UHNW have investable assets of more than $10 million (definitions may vary between institutions).
These are assets available outside of the primary residence and may or may not include savings in their superannuation account. Private Banking generally prides itself on a highly personalised and trusted service provided to either the individual or his/her family, as opposed to a corporate or business.
In the context on the Australian Private Banking landscape, various financial institutions provide personalised services and trusted advice to sophisticated investors who demonstrate an intent to either ‘borrow’ or ‘invest’ at least $1 million (minimums may vary depending on the institution). ‘Borrowing’ would include items such as a loan for a residential property, or an investment property loan, credit cards, foreign exchange needs, some type of commercial lending for a smaller business; whereas ‘investing’ involves seeking advice related to managing a portfolio of shares or investments, which could be as narrow as simply domestic shares or more broadly discussing an approach of building a well-diversified investment portfolio.
RESCU: What are the top 3 benefits of moving to private banking?
Ralf Haase: At Commonwealth Private our clients receive priority access to a range of financial opportunities and access to a team of dedicated banking and advisory specialists.
We particularly pride ourselves on the following three items:
- Personalised service with a dedicated person looking after your particular needs.
- Direct access to a Private Banker and/or Financial Adviser to seek optimal solutions for your needs, whether it is a lending need or an investment advice need.
- Understands our clients’ circumstances to support them and their immediate family directly in achieving their financial goals.
RESCU: Are there any additional fees and costs associated with private banking?
Ralf Haase: There are a number of different fee structures and models applied across our industry. It is best to speak to a Private Banker or Financial Advisor about the specific services and products you require to determine any fees or costs associated.
RESCU: How can you approach your financial institution to request assessment for private banking?
Ralf Haase: Typically the easiest way is often to call the institution. We also find that many clients are referred to a private banker, after speaking with a friend, colleague or family member who already enjoys the benefits of a private banking relationship.
In an initial meeting with the Commonwealth Private team we will generally try and get a sense for your objectives and what you are trying to achieve, be it a particular need to ‘borrow’ funds for a particular investment, or seek help in the management of your investment affairs. In both cases if your desire is to have a more personalized service as opposed to dialling a general help line or a call centre, private banking is a worthwhile consideration.
Once you have a qualified Private Banker or Financial Adviser on the phone, it will be relatively straight forward to assess in which part of the financial institutions your needs can best be satisfied and supported.
RESCU: What are some of the additional services offered to private banking clients?
Ralf Haase: Services offered to private banking clients may include strategic financial advice, portfolio management, management of banking requirements, wealth protection, and brokerage and research.
Benefits of private banking include personalised service, holistic and sophisticated advice and access to a broad range of opportunities that exist.
This includes having a ‘dedicated point of contact’ – a relationship with someone who understands and proactively anticipates your financial needs, frequently and proactively contacts you, and offers a wide range of suitable products and services which are screened for relevance. Those benefits come to life as your affairs increase in complexity and you need a helping hand in terms of debating what your best options are and what the different ways are to achieving very specific outcomes.
RESCU: What are your top tips for wealth management to private clients big and small?
Ralf Haase: Focus on ‘value’ not ‘price’, good advice and good support does cost money. Do your research, ask around, and interview a number of Private Bankers and/or Financial Advisers. You will find that most people are willing to give you time and insights into helping you find the right solution for your needs. Be open minded and not adverse to debating different views and opinions.
RESCU: What are some of the financial benefits of being a private banking client?
Ralf Haase: For many clients the benefits of private banking lies in the access to personalised service, tailored and holistic advice, and access to a full range of opportunities that exist. In the feedback we’ve received from our clients we know this is something they truly value.
For more information go to: www.commonwealthprivate.com.au
Ralf Haase was a speaker at the deLux Forum 2013