WHAT
PERKS DO PRIVATE BANKERS OFFER WEALTHY PEOPLE?
Posted
by EXOGEN on
August 17, 2013 at 1:16am in Bank Information
Private
banking offers perks to wealthy
By Claes Bell • Bankrate.com
Highlights
Banks
of all sizes offer private banking perks to wealthy customers.
Higher
level of service, better rates part of package.
Drawbacks
include high turnover, conflicts of interest.
Consumer banks of all sizes have private banking divisions that offer
enviable perks to high-net-worth individuals.
Private banking clients who bring their large accounts to a bank get
great rates and a degree of service that guarantees they'll never wait in
line at the teller again.
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"I always told (my clients), 'Don't go to the branch; I'm your
teller. You need a check cashed? You need checks ordered? Call me,'"
says Michael Baughman, who previously worked for a private banking division
of consumer bank BB&T, based in Winston-Salem, N.C.
Banks pursue these wealthy clients because they generate a lot of money
and repeat business. For customers, it's a little like getting a suite
comped by a Las Vegas casino floor manager: The casino serves up the
high-roller treatment to keep you sitting at its tables.
"You have that one point of contact to call for anything that you
need, whether it's ordering checks or investing money or borrowing
money," Baughman says.
Perks of
private banking
Private banking perks begin with concierge-style service for banking
chores like opening CD accounts or
managing checking accounts.
Scott Farber, senior vice president and wealth strategist with U.S.
Trust, a wealth planning division of Charlotte, N.C.-based Bank of
America, compares the private banking experience to eating out at a
five-star restaurant.
"You expect a higher level of service," he says.
Higher rates on deposit products like CDs and approval for that
hard-to-get jumbo mortgage refinance become much easier to get, Farber
says.
Baughman says that when he worked at BB&T, "everything was
negotiable" for private banking customers, including the bank's stated
fees in terms of closing costs for mortgages, closing costs for home equity
lines or retail loans.
"There were interest rates on CDs, checking accounts,
depository accounts -- those were all negotiable, and you had a wider range
of negotiating power to go out and capture those folks," Baughman
says. "If you could make a case for it, the sky was the limit."
Who's invited?
Some private banking divisions acquire clients mainly by invitation,
using information they come by during the course of normal lending
activities, Baughman says.
"Banks have a unique advantage in targeting individual wealth
management services because they've already got a lot of financial
information on clients -- folks that have taken out a personal loan or a
business loan," Baughman says, who is now a Certified Financial
Planner with Abacus Planning Group in Columbia, S.C.
Because the bank can access tax returns and other personal documents,
it's "easy to figure out, 'Hey, these folks have a million bucks
sitting over at Merrill Lynch,'" Baughman says.
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Banks also acquire clients through referrals from existing customers.
"The high-net-worth community is by definition not very large, and
so when you do a good job for a client, they all talk to each other, so
client referrals is one of our largest (sources of new clients)," says
Farber.
Read more: http://www.bankrate.com/finance/savings/private-banking-offers-perks-to-wealthy-1.aspx#ixzz2cCUb4OPu
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