Branded gold bars, a 24-hour concierge, or simply a black card to flash and impress at the bar. Welcome to the world of private banking – a million miles away from the average half-an-hour wait for a call centre representative to answer your call.
The decline of Britain’s bank branch network and the rise of online banking has led to a growing number of people seeking private banking services where the personal touch remains.
Companies such as Metro Bank, which is due to open a new private banking suite on London’s Kings Road at the end of this month, claim such services are in demand. Its private banking service is available to anyone with £1million worth of assets or borrowings with the bank. It has just increased the number of staff dedicated to the service by a third.
Julie Barnsley, head of private banking, says: ‘Our customers like to have the phone number of their relationship manager, and the service is free.’
Private banking customers say the benefits of banking this way include personal service, networking contacts and a better understanding of their needs, now lacking on the high street.
effrey Thomas, from Bath, banks with Arbuthnot Latham, which provides personal banking services to clients with assets in excess of £1million.
He says: ‘I’m old enough to remember when everyone’s bank manager was a private bank manager. But I now need a private bank manager to maintain the personal service I like.
‘Arbuthnot Latham delivers added value and treats me as an individual. Most banks act like everyone is the same when in fact everyone’s financial circumstances are different.’
Private banks range from the exclusive offerings of C Hoare & Co – Britain’s oldest private bank – to the more prosaic upper tier services of familiar high street brands.
Some offer little more than a different coloured debit card, while others give you branded gold bars or an opportunity to network with the great and the good.
FOR THE MERELY WEALTHY
Although private banking services are perceived as being only for the ultra-rich, many banks are offering higher-end services for the merely well heeled.
Kevin Mountford, banking expert at comparison website Moneysupermarket.com, says: ‘Many banks now offer bespoke services which are aimed at people earning around £75,000 a year.
‘In reality, the offerings are more in line with a premier service rather than high-end private banking.’
He advises customers to shop around as all banks are now competing for business. He also warns that banks often cross-sell, bombarding customers with investment ideas or other financial opportunities. This ‘merely wealthy’ level of private banking includes the top accounts provided by mainstream high street banks.
Those with an annual income of more than £100,000 or assets of £50,000 in savings and investments are eligible for HSBC Premier – provided they also satisfy other criteria such as having existing products with the bank. HSBC’s service includes a dedicated relationship manager as well as preferential rates on a range of products.
The account includes free travel insurance worldwide for the under-70s and is free – although fees apply for extra services such as financial planning. Barclays offers several levels of private banking.
For those with £500,000 or more in cash deposits, investments and mortgages, it provides an exclusive private banking arm. Those with more than £100,000 saved or invested with the bank – or an annual gross income paid into a Barclays current account of £75,000 or more – can apply to be Premier customers.
Premier clients are promised access to a dedicated relationship team, and a black debit card that allows you to withdraw £1,000 a day from cash machines. The service is fee-free.
Cater Allen is a private bank owned by Santander. It requires customers to have £100,000 in savings or investments with it. Those with less than £5,000 in their account are charged £15 a month. It says staff are selected ‘to provide the highest level of customer service’.
Harrods personal banking is less exclusive than it sounds, as it is available to those with an annual salary above £75,000. Bank charges apply in any month where the average account balance falls below £5,000. If the cachet of flashing a Harrods bank card is not enough, there is always the option of buying branded gold bullion to go with it.
TOP END PRIVATE BANKING
At the top end of private banking, customers should expect to be accepted only if they have a serious amount of assets and receive a personal introduction.
Weatherbys counts horseracing experts and the landed gentry among its clients. Customers need £3million in assets or £300,000 in annual income to qualify.
C Hoare & Co, a truly private bank owned by the same family since 1672, keeps its eligibility criteria a closely guarded secret. It says most new clients are introduced by existing ones. Its website warns: ‘Before you join the bank we will thoroughly explore the potential for our relationship. We are not for everybody.’
Coutts & Co, banker to the Queen, is more transparent and is now owned by Royal Bank of Scotland. Those with investable assets of more than £1million should be eligible.
Owning a top-tier Coutts Silk card can bring significant benefits including a 24-hour concierge and loyalty-based food, wine and travel gifts. From next month customers will pay £900 a year to bank with Coutts if their combined assets and borrowings drop below £250,000 and £300 a year if their combined assets and borrowings drop below £500,000 but are more than £250,000. They will pay £300 a year for joint travel insurance, waived if their assets and borrowings are above £1m.
Metro Bank, despite its image as a high street operation, also counts sports stars and wealthy businessmen among its private banking clients. Unlike rivals, it does not offer a wealth management service, although clients value its networking dinners.