Saturday, December 10

How much money does it take to be a private banking customer? Updated requirements

Personal banking, private banking and private wealth are the categories in which Spanish banks divide their premium clients. Belonging to one or the other will depend on the patrimony that one has and will be different in each entity. Regardless of the category to which the three groups belong, the differentiating characteristic of retail banking is exclusive treatment.

If you have sufficient capital, the client will be able to access premium services that include a personal advisor from the bank itself, who will provide investment recommendations on their portfolio, access to investment products outside the commercial banking circuit, such as sicavs.

Why this distinction? With this classification, entities seek to better understand their customers: identifying their needs and their objectives. In this way they can offer, on the part of the entities, a more adequate service.

Regarding additional advantages, being a private banking client also tends to provide a notoriously preferential treatment that translates into different advantages such as the absence of commissions on some products, special cards, better conditions for contracting any banking product, invitations to exclusive events. …

Personal banking, the first step

It is the first step. The entry barrier will depend on the entity. Banco Santander’s personal banking division is Santander Select. To have access to it you must have at least 100,000 euros in the account.

At Bankinter, to be part of the personal banking family, it is necessary to be a customer with an income of more than 70,000 euros or with assets of between 75,000 and one million euros.

For its part, premier banking is Caixabank’s option for personalized wealth management. The objective is to strengthen the management of clients with assets of between 100,000 and 500,000 euros.

These types of clients are characterized because more than day-to-day financial management, they seek banking services to manage their deposited financial assets in the medium or even long term.

The service that personal banking clients can receive may be more dedicated to monitoring the investment of their assets.

One step further: private banking

The next step is private banking. These are clients with assets from 500,000 euros, although some entities, such as Andbank and Banca March, lower the cut to 300,000 euros. On the other hand, Bankiner Private Banking and UBS raise the requirement to one million euros.

These clients have different needs than personal banking clients since the more wealth the greater the possibilities for diversification of investments.

In addition, they may have access to products that require a high barrier to entry. Some funds or alternative investments require a minimum investment of 100,000 euros, a cut that is not available to all bank clients.

Assets of millions of euros in private wealth

Large family groups, with assets of 10 or 20 million euros, would be included in private wealth. Precisely, entities such as Sabadell Urquijo Banca Privada have the bulk of their clients above two million euros even though they cut 500,000 euros. To this must be added family groups, with assets in excess of ten million euros.

What are these customers looking for? In short, these are clients who, in addition to wealth planning and management, have needs related to advice and real estate brokerage, but also for example in investment in art and philanthropy. It could be said that they require a much more complete service than the rest of the clients.

Regarding investment, the products they are betting on are alternative management funds, private equity, corporate operations, investment funds for professionals … that is, these are products that require greater financial knowledge.

Regarding the work carried out by the banker, his mission is to know the risk profile, liquidity needs, investment experience and time horizon of this type of client.

And the succession issue becomes very important, especially if it is an entrepreneur, so the products in which it has part of its assets are related to it, such as unit linked.