Choosing A Private Banker
CHOOSING A PRIVATE BANKER
By Lisa Christiansen
This is a relatively new service that many people are unaware of or think that it only is applicable for the super rich. Many of us would be insecure about deciding if we did need such a service and how to go about choosing one if we did think it was something worth considering. Often times your personal banker or even someone like a teller would mention such a service and direct you to that person or department. This would be a good starting point, but like many decisions, just because you bank there doesn’t mean their private banking department is the best choice for you, same thing would apply to trust services. It never hurts to shop and compare. The first meeting would normally be a dog and pony show and speech and they would have some brochures about the bank and their services. Appropriate questions would include the minimum amount needed to invest (this would give you a feel as to if your amount is something they target). What is the total amount of assets they manage? How long has your institution been in the business of private banking? If you get good enough vibes from that meeting and go back to see them again there are several other inquires that need to be made. Don’t be embarrassed if you need time and more meetings until you decide if they are a good fit for you. I would ask them to describe their investment philosophy (it should match yours as closely as possible). What are your weaknesses? (I wouldn’t be impressed if they said “none”). What sets you apart from other wealth managers and private bankers? (don’t be satisfied with general answers, insist on specifics). Are your investment figures verified by an independent third party? (good, if answer is yes). What is the process used to make investments? (is it done by committee or solely by you)? There should by a clear step-by-step process which involves a written evaluation of your preferences and wishes. What qualifies you to be a consultant? (specifics like level of experience or business degrees). What is your personal remuneration based on? (how much fees he generates from you vs. overall performance of his clients’ portfolios. What are your fees? (based on size of account or performance results) Ask specifically about transaction fees, flat fees, ticket fees, or government fees. Are there any hidden costs in the portfolio? If so, how large typically (fund fees would be one example). My opinion is that more people should consider using a private banker. They should do a better job than you can, reduce some of your stress, and free some of your most valuable asset, time.
