August 1, 2023
You already know that everyone needs a bank. After all, we all need a place to store our money, access loan options, earn interest, and ensure that we can safely access our hard-earned cash at times of our choosing. That being said, sometimes, you need more. If you are a high-net-worth individual looking to grow your money and ensure your financial future is protected, private banking may better serve your needs, but what exactly is the difference between private banking and retail banking? Let’s begin by exploring what precisely private banking is.
What is Private Banking?
Private banking, sometimes called personal banking, allows you to use personalized, customized services. At most retail banks, you take advantage of their services. Sometimes, this fits your needs perfectly well. Other times, it may not, and trying to use a retail bank’s service may be like trying to fit a square peg into a round hole.
Private banking allows you to build personalized relationships with your bank. These bankers will learn your financial needs and work with you to create customized financial solutions. Furthermore, private banks can access other financial services for high-net-worth individuals like you. This broader array of services allows you to access additional services beyond checking and savings.
What is the Difference Between Private Banking and Retail Banking?
Simply put, the differences revolve around the level of individual service and attention you receive.
At a retail bank, you are a number. Every time you call the 1-800 number or send an email, you will get a different banker — sometimes located in another state or even a different country — who will take 30 seconds (maybe) to review your files and give you information. These bankers are overworked, and they likely won’t understand your needs and give you the advice you deserve.
At a private bank, you aren’t a faceless customer: You are a client with your team. Private banking offers the following benefits:
- Strong relationships with better service: Private banking services — like those offered by First Western Trust — enable you to build deep, personal relationships with your bankers. Our team will work with you to understand your financial needs, and these individuals will then get to know you on a personal level. This relationship-building allows our team to serve your needs better and give you the advice you deserve.
- Enhanced personalization: The goal of any banker or financial team shouldn’t just be to keep your money with the bank as long as possible: It should be to personalize these services to fit your specific needs. To that end, private banking provides enhanced personalization, allowing you to take advantage of various financial needs. This may include personalized checking, savings, CDs, investing, and more.
- Customized solutions: Taking advantage of customized financial solutions requires an integrated approach that can only be built if a private banker knows your needs. Your private banker will work with you to understand your goals, risk tolerance, and need for cash in the future. From there, they will develop customized solutions to ensure your banking, investing, and wealth planning goals are being met.
When Should I Consider Private Banking?
There is no set answer to this question, but there are some general considerations to help you decide when is the best time in your financial journey to consider private banking:
- Has your wealth hit a point where you believe you can benefit from integrated, personal services that take more than just your checking balance into account?
- Can your bank provide customized investment advice that fits your overall financial needs and goals?
- Can your current retail bank handle your estate planning needs, including helping you develop wills and trusts?
- Does your bank understand your business needs and how these needs may integrate with your personal financial goals?
- How has your bank worked with you to manage any financial planning goals, including college, retirement, or specific savings needs?
If you feel your current retail bank is failing you in any of these regards, it may be time to consider a private banking solution.
Final Thoughts
The difference between private banking and retail banking is night and day. Private banking offers you the chance to build critical relationships with your bankers, access better financial options, and ensure your money works for you. Furthermore, it also allows you to build relationships with bankers that will allow them to better understand your needs and offer you custom financial solutions. In doing so, you can work with your bank to build trust and confidence that simply isn’t available at a generic retail bank.
