Pros and cons of having a private banker

 Historically, the services of private bankers were reserved for the most affluent bank clients. Luckily, the times have changed and now, with rising competition on the market of financial instituti…


Historically, the services of private bankers were reserved for the most affluent bank clients. Luckily, the times have changed and now, with rising competition on the market of financial institutions and growing number of bank products more and more customers qualify for having their own relationship manager. Private banking is a personalized service invented to assist bank clients by providing wealth management advice. If you are wondering what are the pros and cons of this arrangement, keep on reading because what follows is a list of benefits, as well as the drawbacks that come together with having a private banker.


The biggest advantage of working with a private banker is the fact that all management and investing solutions are tailor-made for particular clients depending on their financial capabilities and liquidity. If you have a private banker, you can be sure to get assistance regarding investment solutions, retirement and brokerage accounts, insurance products and business related services whenever you need. Private bankers are more flexible, they are not limited by bank opening times, or business working hours, which is essential if you are planning to invest in foreign markets.

First-hand advice

Bank clients, inexperienced in intricate investment strategies depend on the expertise of private bankers when it comes to growing their assets. Having an extensive knowledge on financial products and investment tactics the bankers can advise on the most beneficial investment plan.


Having only one person who handles all your finances is very convenient – it limits the time you spend on running errands, or meeting with different brokers and bankers. But most importantly, your dedicated private banker has a total overview of your finances and can look at your accounts holistically.

Trust issues

On the other hand, when your entire wealth is in the hands of just one person, the risk of mismanagement is immense. Private banking services depend solely on the line of trust between the client and the banker. If your private banker makes one bad investment decision, your entire wealth management plan may come crushing down. It is always advised to cross-reference the decisions made by your banker and double-check if they agree with your expectations.

The fees

Private banking services are still very expensive. Most private bankers usually take 1,5 – 2 per cent of assets under their management. For some clients, it is hard to justify the fees, especially if their wealth is allocated in steady products which do not require aggressive financial strategies.

Profit motive

There is no denying that the more money you make, the bigger fee will your banker claim. Due to that, many bankers like to invest in risky products, which on the one hand promise outstanding profits, but, if something goes wrong, may cost you a lot of money. Also, many people complain that their relationship managers often push different financial products onto them. Banks see private banking sector as a way to sell more and the bankers may turn out to be biased and start putting the products of affiliated banks over the ones that could actually be very profitable for you, but not necessarily for your relationship manager.

These days almost every financial institution offers services of private banking. Whether you run a business and want to have all your profits under control, or you are an individual who is planning on growing the assets and building a safe future for you and your family, the services of private bankers may come in handy. However, there is no right answer and, considering all pros and cons, everyone should make the decision themselves.


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