Key takeaways

  • Private banking relates to the financial services offered to high-net-worth (HNWI) clients who typically have a high income or sizable assets.
  • By definition, wealth management refers to a more general level of investment and financial management of any portfolio, but typically for HWNIs.

An overview

Wealth management and private banking are two terms that are used frequently when we discuss interacting with specific clients in the financial services sector. And, while they both relate to working with affluent individuals and businesses, they do vary in their definitions.

While private banking will incorporate the entire financial circumstances of an individual or business, including the protection of specific assets, wealth management relates to a broader investment and financial plan.

Typically, private banking corporations, such as RBS, will be able to offer wealth management services under their private banking model. Wealth management corporations, however, will not usually provide private banking services.

To help better understand the exact meaning of both wealth management and private banking, we have outlined their benefits below.

What is private banking?

As referred to above, private banking is a direct service reserved for high-net-worth individuals, with the bank managing the financial circumstances of the client.

Due to the fact that private banking is tailored for affluent clients, many corporations introduce eligibility requirements for any prospective clients. This can be in the form of a minimum balance, investments, arrangements or anything else decided by the bank itself.

The ultimate aim of a private banking service is to help clients protect and maintain their assets and finances, related to their specific goals and requirements.

Benefits of private banking

There are a number of benefits associated with private banking for clients, including:

A more personalised service

Due to the vast amounts of money and assets being invested with private banking, corporations typically offer a much more attentive level of service, with many banks providing a dedicated representative to enhance support in a range of areas.

Pricing benefits

While specific prices and benefits may not be set in stone, a client is likely to receive the strongest possible advice and offers when engaging with a private banking service.

Saves time

It may seem obvious, but clients that use private banking will be able to contact the bank directly, without having to wait in a queue at their local branch on holding on the phone.

What is wealth management?

Wealth management can be defined as a service or consultancy where clients are advised on how best to manage their investments and assets in order to meet their goals and improve their financial stance.

While a wealth manager will tailor strategies for portfolios of all sizes, they are more commonly associated with high-income clients who are looking to invest large sums of money (or valuable assets) wisely.

As opposed to a private banking service, wealth management is primarily related to client investments.

Benefits of wealth management

The benefits associated with wealth management include:

Wiser investments

A highly skilled wealth manager will be able to clearly identify the risks associated with a particular investment and advise accordingly against the client’s situation, helping them to make investments that suit them best.

Long term planning

Highly affluent clients will no doubt want to plan for their future, including their retirement. By enlisting the help of a wealth manager, they can be safe in the knowledge that their finances are prepared for when they retire.

Greater levels of service

Similar to a private banking service, a wealth manager will act as a direct point of contact for clients in order to maintain a strong professional relationship and provide the best level of support.

MDA Training’s programmes for private banking and wealth management

We believe that relationship management is crucial to a successful private banking service. That is why our virtual learning programmes go beyond merely teaching new hires and experienced employees the basics.

With over 30 years’ experience in delivering tailored training solutions for leading private bankers and wealth managers alike, we understand what it takes to build strong relationships with high profile clients.

Our blended approach draws on virtual simulations and e-learning to deliver a training event that is high impact, memorable and engaging.

Find out more about our wealth management training simulation here.

Find out more about our private banking training courses here.