What is a Private Banker?
Private Bankers are typically employed by larger financial institutions and work with other specialists within the Private Banking platform. The Private Banker is the “Quarterback” of the Wealth Management team and will partner with specialists who are trained professionals in Investment Services, Trust and Estate Planning and Wealth Management products and services.
The goal of a Private Banker is to manage their clients’ financial circumstances with a focus on building and maintaining a strong relationship between the client and the bank.
Training and Education of a Private Banker
A Private Banker may be required to have FINRA and NASAA licenses such as a Series 6 or Series 7 to offer investment advice and they may also be required to have undergone Formal Credit Training in a Bank Credit Training Program.
Credit is a broad term that has many different meanings, for this discussion financial credit includes mortgages, lines of credit and commercial credit. A High Net Worth Individual (HNWI) may purchase a private jet or a yacht or several vacation homes. The Private Banker would be their key contact for these types of credit.
Most financial institutions require Private Bankers to have a bachelor’s degree in business, finance or accounting. Some financial institutions require a master’s degree as well and ongoing training is provided on the job.
Private bankers cater to the High Net Worth Individual (HNWI) or the Ultra High Net Worth Individual (UHNWI) Each bank has their own benchmarks for defining these categories, but a general rule of thumb is that a HNWI will have investable assets of $1 million to $30 million, usually excluding personal assets and property such as a primary residence and collectables. UHNWI are generally quoted as having investable assets of $30 million and up.
When a client is brought into the bank, the first step is to evaluate their current financial position. This review involves gathering information about their clients’ total assets including property, business interests, bank account balances and the value of all investment portfolios.
Private Banking Team
Once the Private Banker gathers and evaluates the information about the client’s financial situation, they often partner with other specialists on their team. For example, if they are making recommendations focusing on estate planning needs, such as establishing a trust for a spouse or heirs, or obtaining an appropriate amount of life insurance to protect heirs from paying excessive taxes, a Trust and Estate specialist may be brought in.
The Private Banker may also make recommendations on how to position investments and savings to achieve the client’s objectives. If they require an expert, they may invite a Wealth Advisor or a Financial Advisor, to join the conversation, as they specialize in suggesting detailed portfolio positions for investment accounts and the allocation of assets or certificates of deposit or non-traditional alternatives to preserve capital.
HNWI’s often need to reduce tax obligations and Private Bankers may make suggestions regarding tax efficiency in short and long-term investments and may bring in an Investment Specialist.
To offset tax liability, Private Bankers may suggest that clients consider the financial benefits of philanthropy and may vet the charities to ensure a donation would provide a tax deduction.
As you can see, the Private Banker will work closely with several internal partners at the financial institution. The Private Banker is also a specialist, in what we call credit and lending. In addition to having general knowledge about Wealth Management, Trust and Estate Planning, etc., they must have a great understanding of the banking and financial systems along with knowledge about credit and lending.
Private bankers are trained and educated to be the leader of the entire banking team.
Written by Linda Noland, President of Stone & Associates Executive Search