Dale Carnegie talks about the ‘feeling of importance. “The desire for a feeling of importance is one of the chief distinguishing differences between mankind and the animals. This desire makes you want to wear the latest styles, drive the latest cars, and talk about your brilliant children”.
Private banks are good at making you feel important. But what are they selling and what do you need to buy?
Private banks want to sell the highest margin products possible. Of course, that’s not the narrative, but when you think about it a little more deeply, you’ll appreciate that is their goal.
What do you want? In the majority of cases, clients of private banks need administrative support. It’s rather like having a private secretary to manage the administration of your money. Yet, whilst you get administration help from the banks, you pay the price by using their high-margin products. Which means you are vastly overpaying for your needs.
In so many cases, investors could hire a private administrator full or part-time to manage the administration and take more control over their investments. Both will deliver better outcomes.