Private Banking Versus Retail Banking

In past, the services of private banking could be availed only by those investing substantial amounts (up to M), while retail banks never imposed any such restrictions. But, things have changed over time. When you look at the distinct aspects of private banking and retail banking services, the biggest difference is the sheer fact that private banking offers meticulous attention to every client with the help of relationship manager, which doesn’t apply to its counterpart (retail banking).

The Non-Incorporation private banks are those, which aren’t incorporated legally, but are in existence as a separate entity. Due to the personal responsibility of the Directors who are personally liable and cautious in handling the funds, Private Banks are favored by conservative investors. Confidentiality is the chief reason for the wealthy people to choose besides corrupt governments, criminals etc.

Private Banks in Switzerland is galore for the reason they maintain strict bank secrecy laws.

Due to confinement of their operations within the country’s banks, even small banks need to maintain secrecy of client records, be it in Switzerland, USA or any other country.

It is not that private banking services are offered only by the private banks but it can be seen that though UBS, Credit Suisse and the Barclays are also private banking and wealth management services, they are not bracketed under the private category. Major advantage for the Private clients of these banks can reap the benefit of their in-house trading and other areas, giving carte blanche to manage most of their assets by the bank.

Generally, the wealth management services are sought only by filthy rich clients who approach the private bankers where private bankers manage an investment portfolio for a family, business group or an individual.

The fee for this service varies from bank to bank and is charged yearly as a percentage of the total amount invested. The return of a portfolio will also depend on the standard of the services provided by the concerned bank.

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