Private banking

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Under Private Banking is understood in banking all financial services that banks its wealthy private clients offer. In addition, this is usually the name of the bank departments in which this banking business is carried out.

General

The anglicism of private banking in the German-speaking credit system thus includes all banking transactions that are available to the target group of rich high net worth individuals . There is no uniform definition; Bettina Howald's basic work from 2007 provides a summary of the most important definitions. An essential component of private banking is, in any case, the segmentation of customers according to wealthy, wealthy private customers. What exactly is meant by this is answered inconsistently. Most banks worldwide set a minimum amount (around 1 million euros in assets under management) in order to identify customers for private banking. The Boston Consulting Group divides it as follows:

  • Non Wealthy : < US $ 100,000
  • Mass Affluent Investors : $ 100,000 to $ 1 million
  • Emerging Wealthy Investors : US $ 1 to 5 million
  • Established Wealthy Investors :> US $ 5 million.

The typical banking group that operates (exclusively) private banking is the group of private banks . The term private banking sounds like a private bank and is mostly associated with it today, but other groups of institutes are also trying to win customers over to private banking, especially since they usually have the financial products and technical know-how anyway . Today, private banking services are offered and provided by a large number of banks, regardless of their legal form and ownership. In addition to traditional private bankers (see also the definition of terms there ) and major banks , savings banks and cooperative banks have also been active in this area for years.

Content and services

Advice in private banking is more intensive, more individual and / or personal than in mass customer business . The idea of ​​an institutionalized multi-family office is an important part of the private banking philosophy. The aim of the banks is to establish a long-term and trusting customer relationship with wealthy customers as the house bank , which carries out a comprehensive asset analysis of its customers during investment advice and divides them into risk classes in accordance with Section 63 (10) WpHG . Based on the willingness to take risks and the resulting risk profile, the investments corresponding to this profile are selected.

Private banking takes place in four phases:

  • Acquisition and consulting phase: identification, acquisition and consulting of customers,
  • Investment phase: use of banking products,
  • Settlement phase: execution of financial transactions and
  • Control phase: monitoring the performance of the financial products.

Private banking initially includes the use of standardized banking products such as payment transactions or securities custody business , which are also offered to other bank customers. The following services in particular are core businesses :

  • Investment advice : The client receives investment proposals from his advisor, from which he can choose (alone, together with the advisor or together with third parties, e.g. tax advisor ).
  • Asset management : The customer instructs the bank to manage his assets according to established principles, e.g. B. Risk Rating, manage; He does not directly influence individual investment decisions, but leaves these and the control of the performance to his bank.

The services that are offered in the context of private banking have become more extensive. Years ago it was only investment proposals and a detailed account statement, today we often work with definitions of the investment objective, expected returns, success monitoring and extensive investment proposals. Customers' specifications such as the rating for bonds or stocks , the range for the price / earnings ratio for stocks, the exclusion of certain industries ( arms trade , genetic engineering ) and their risk appetite are individually addressed. In addition, private banking pays attention to tax optimization in order to trigger as few taxes as possible on investments.

High Net Worth Individuals

According to a study by Capgemini and the Royal Bank of Canada , there were 12 million so-called high net worth individuals (HNWI) worldwide in 2012, i.e. people with more than one million US dollars in liquid assets (investable assets). Together they had investable funds of $ 46.2 trillion. Most HNWIs, namely 3.7 million, lived according to the study in the Asia-Pacific region and in North America (also 3.7 million HNWI). 3.4 million lived in Europe.

meaning

Private banking is gaining in importance, especially as the sum of inherited wealth is growing every year, especially in developed countries. The special trust of the customer and the high intensity of advice create so-called personal preferences on the bank side, which can reduce the price elasticity on the customer side and increase customer loyalty . Therefore, in most cases, customers will not be able to change their house bank. The long-term nature of the business relationship may allow private banking to be extended to include inheritance and succession issues in companies .

Differences in taxation in different countries, the customer's desire for tax optimization and banking secrecy have led to the internationalization of private banking. The Switzerland , Austria , Luxembourg and offshore financial centers such as the Bahamas , Bermuda , Cayman Islands and Jersey have with their liberal framework facilitates access for high net worth individuals.

literature

  • Heike Brost, Martin Faust (Ed.): Private Banking and Wealth Management . Bankakademie-Verlag, Frankfurt am Main 2006, ISBN 978-3-937519-52-4 .
  • Markus Rudolf, Katrin Baedorf (Ed.): Private Banking (= compendium of banking application fields ). 2nd Edition. Frankfurt School Verlag, Frankfurt am Main 2011, ISBN 978-3-937519-71-5 .
  • Dominik Löber: Private Banking in Germany. Strategy and organizational architecture (= publications on European management ). Springer Gabler, Wiesbaden 2012, ISBN 978-3-8349-3558-8 .

Web links

Individual evidence

  1. ↑ Bettina Howald, Customer Value in Private Banking , 2007, p. 15 ff.
  2. ^ Boston Consulting Group: Searching for Profitable Growth . Global Wealth, September 2005, p. 4.
  3. ↑ modified from Bettina Howald, Customer Value in Private Banking , 2007, p. 29 f.
  4. ↑ These questions should be asked by an asset manager (PDF; 34 kB). MyPrivateBanking Research, May 4, 2010. Accessed March 26, 2014.
  5. ↑ Ulf Gerlach, Building Global Brand Images in International Private Banking , 2001, p. 108
  6. ^ World Wealth Report website