The Guardian Bank | financial sector articles


How to Do Wealth Management with Private Banking?13 min read

How to Do Wealth Management with Private Banking?13 min read

Reading Time: 5 minutes

Wealth management is a growing industry which is estimated that the assets under management will be approximately 145.4 trillion dollars according to PWC. Wealth management is a comprehensive consultancy service that helps wealthy clients, whether individuals or families, to control their financial assets according to their specific needs. 

Wealth managers aim to grow their client’s financial situation, protect their current assets, make risk management decisions, tax planning, real estate investment, etc. 

Private banking is a service where banks and some financial institutions provide high-net-worth customers to reach their financial goals. This service includes asset management, investment advice, and monetary planning.

High-net-worth individuals and families generally choose to take consultancy about wealth management to manage their assets and investments effectively. The wealth managers also can have expertise in specific areas like cross-border wealth management

The openness of a client to the private banker is essential therefore,  the customers should bring their financial objectives, risks, and plans to the fore. 

wealth management

What is Wealth Management?

Indeed, wealth management does not involve only investment advice but covers all their client’s financial life. The high-net-worth individuals or families take advice from a wealth manager to control and preserve their assets over time.  Wealth management is a comprehensive approach that combines several services. For a certain fee or a certain percentage of the assets under management, wealth managers give consultancy about investment, tax services, estate planning, accounting, and retirement planning. 

The wealth manager, financial consultant, and financial advisor do the same job under different titles. Customers should also check the wealth managers’ compliance certificate to better understand which best suits their goals. Then, they develop a personalized and comprehensive plan to reach their clients’ targets. 

After they create the plan, the client and the advisor communicate with each other regularly to keep their portfolio updated or to act if it is needed. The plan generally consists of seven main points.

Investment Management: According to clients’ risk tolerance and future financial goals the investment alternatives are evaluated.

Risk Management: The risk management aims to keep clients’ financial assets in terms of insurance or other tactics.

Financial Planning: Wealth managers create a comprehensive roadmap for the clients to increase their wealth based on the current financial picture. The plan consists of tax planning, retirement planning, estate planning, and financial projections. 

Estate Planning: Estate planning consists of reorganizing the estates into charitable institutions or heirs to minimize tax expenses.

Tax Planning: Proper tax planning reduces tax liability and increases VAT refunds.

Retirement Planning: Retirement planning aims to offer a financially well-situated retirement to the clients by optimizing investment objectives.

Legal Compliance: The clients’ financial strategies should follow the related laws and regulations.

To sum up, clients can construct, control, and preserve their prosperity over time with the help of a wealth manager.

How to Do Wealth Management?

As we mentioned above, wealth management is an extensive method including managing high-net-worth clients’ assets according to their financial targets. Clients can choose their most suitable private wealth manager according to their working conditions, like fixed fees, or according to their specialized area.

The first step to take is to set a clear financial objective. The goals can be identified as long-term and short-term and prioritized according to their necessity and importance. The goals can be a retirement plan, a new estate, or starting a business. Then the cash flow must be analyzed in terms of income, expenses, and current funds. 

Assets and liabilities should be divided in detail. According to the assessment of the financial situation the budget should be developed and checked regularly to see if it still fits with the goals and financial status. 

A cash reserve that will cover three to six months for living expenses, should be set aside as an emergency fund which is easily turned into liquid. Insurance coverage is another important point to consider. The insurance should protect assets and close relatives.

After the budget, coverage, and emergency fund are established, investment, retirement, and tax planning should be covered in detail. All assets should be distributed in a way that minimizes risk. The investment plan should be regularly reviewed and reorganized according to the goals. 

A well-designed retirement plan will also offer clients a comfortable retirement life in the future. To be more profitable, tax-efficient investment strategies should be followed while considering available tax reductions and other implications. 

Especially after vital life events, you can prepare a draft testament that will distribute assets logically.

Wealth management is a dynamic context therefore staying informed about new regulations, options, and trends is crucial. Working with a professional would be a good option to be updated.

How to Open a Private Banking Account?

Both opening a regular or private bank account are similar except for the minimum requirements for a private banking account. Since private banking account holders should have a minimum financial asset, they offer a more personalized and unique experience to their clients. The procedure may depend on the bank, the main steps are below.

You should meet a minimum asset requirement to use a private banking account.

Selection criteria for a private banking account should be aligned with the financial goals and needs of the clients.

Communication with the bank can be made by person-to-person, customer service, or online. It means you can also prefer to use wealth management in digital banking.

In a meeting with the private banker, you should take a picture of your financial status, and clarify your goals and expectations. Private banking services should also be covered in the meeting.

There are several documents that should be presented to the bank such as proof of identity, proof of address, information about financial status, and some other bank-dependent docs.

After the approval process, you will sign some agreements about the given private banking services.

wealth management

What is Private Wealth Management in Banking?

High-net-worth individuals have a complex financial structure that requires specific concentration and strategies. Private Wealth Management (PWM) in banking is a more personalized and unique service that is used by high-net-worth individuals and families to protect, manage, and increase their overall wealth. 

Individuals can benefit from private wealth management in digital banking. You can take this service from investment firms, financial institutions, and banks like The Guardian Bank. Their focus is to support their clients to grow their prosperity in the long term by taking necessary actions.

Private Banking Minimum Requirements

Although there are main minimum requirements, it depends on the private banks and institutions’ suitability criteria and application procedure. The clients should have a significant level of prosperity which includes basic liquid assets and a minimum annual income. 

Investable assets like real estate, stocks, and bonds are also another point that the private banks may require a minimum threshold. Clients also should have kept a certain amount of deposit in the bank account. The last important requirement is the history of their client’s creditworthiness.

How to Do Wealth Management with Private Banking Online?

Digital banking wealth management refers to the use of digital tools and platforms to manage the clients’ wealth in line with the goals. The online presence of the bank is important for the selection process. 

With these digital wealth platforms, you can open your private bank account online, monitor the data in real-time, access your advisor online, and can benefit from additional security services online. You can use online tools for optimizing tax liabilities, developing a financial plan, and transferring wealth.

It is highly recommended to consult a professional in wealth management to grow your current wealth. You can have more information from The Guardian Bank and their offers for their private wealth management clients.