What is private banking and how is it different from regular banking?
Private banking is a customised service offered by banks to individuals to help manage their finances better, be it savings, investments or tax planning. Apart from personalised advice by a relationship manager, you can avail of preferential rates of interest, freebies, get rid of nuisance fees and queuing up at bank branches.
Do I need private banking?
Go for private banking if:
• You want to manage your portfolio using premium service and professional investment advice.
• Your investment goal is medium- to long-term growth (3-5 years).
• You want to adopt global diversification as a strategy to counter economic uncertainty.
• You have investments in different countries, which requires knowledge of international tax laws, or you need accounts in multiple currencies.
• You want to preserve your wealth and minimise uncertainty.
Which bank should I choose?
Define your requirements clearly before zeroing in on the bank. For instance, if you are close to retirement, you want a manager with a good track record in retirement planning and business succession preparation, but if you are a small business owner looking to expand, you need someone who understands your risk tolerance, yet makes your money grow aggressively.
Also, determine if the bank has the stability and track record to help you attain your financial goals. Once you have narrowed down the options, arrange for personal interviews with the appropriate bank personnel because private banking is a oneon-one effort and communication and trust are key factors.
You also need to check that the relationship adviser is handling a manageable number of clients. This is important to avoid being fitted into a pre-prepared structure that is not customised to your needs.
Do I need to fulfil any criteria to avail of private banking?
This service is limited to high net worth individuals with an investible surplus of at least Rs 10 lakh. Then there is the annual fee to consider, which can be anything upward of Rs 10,000. But whether this is a good investment will depend on how well you utilise the services of your manager and how frequently you avail of the freebies.
Also, ask for the schedule of charges beforehand and check upfront what, if any, extras you may have to pay for the service.
