Private banking is a group of financial institutions that are intermediaries between economic agents (people, companies, the State). This institution consists of a highly professional and comprehensive management of a client's assets. They have the objective of satisfying certain needs such as: investments, wealth, financial and tax planning of people or family groups with a high wealth. So we can say that private banking has several functions. He is dedicated to financial advisory and wealth management tasks. For this, the bank has to take into account several factors for which, it is essential to do a good analysis of the client.
The client has to know: their risk profile, profitability objectives, need for liquidity, time horizon and fiscal situation. The private banking service offers the customer a personalized and appropriate service for him, which is why it is necessary to know certain customer information.
Types of private banking
There are two ways to structure a private banking service:
1. The first is American style. This consists of doing private banking from investment banking, and is more focused on the corporate client, coming from a wholesale bank.
2. And the second style, the Swiss-Spanish, consists of a more patrimonial private bank. That is to say, it focuses on clients with high assets to offer them quality of life and control over their assets.
Characteristics of private banking
The main characteristics of private banking are the following:
- Estate, financial and tax planning.
- Intergenerational organization.
- Custom management.
- It offers a wide range of products and services.
- Strong relationship with the client.
In short, it satisfies the global needs of a client's assets. In addition, private banking offers you many interesting services, such as investment in real estate assets, availability of fondos de inversión, wealth tax optimization, and many others more adapted to your clients.