The key attraction of a private bank is the relationship.
In 2015, a Deloitte survey with private banks and wealth managers asked what would most differentiate their institution from others in the next five years, the overwhelming majority answered: “client relationships”. “In many cases, when clients leave an institution, it is because of a lack of understanding with the relationship manager and not investment performance,”
History combines ‘the relationship manager’ with ‘the products’. It’s been that way for years. But does that mean it will stay that way for years?
Wealth managers and banks are having to adapt to changing times and there is clear pressure on the old model of products and service. You do not need the wealth manager or the bank for service. You can still buy their products if they are good enough. It is in the bank’s interest to keep the old model alive. It is not in the customers best interest to continue the old model.
Think about what happens in practice. You join a private bank. They appoint a relationship manager. It feels like they are there to act for you, but most people accept the conflict. But then the relationship manager moves on. You get another one. And another one. Where is the relationship? It’s not a relationship; it’s dating the bank.
You can now build a relationship outside the bank but continue to use the bank and its products and facilities. What could be more perfect?