Private Banking Flashcards
What is private banking?
What is private banking?
- Private Banking is defined as any lending relationship that does not fit squarely in the box of all other lenders, any client that is deemed by another department to be demanding or time intensive, or any client that is asking for something that others in the bank know nothing about.
- Private Banking is offering personalized financial and banking services to high net worth and or high net worth individuals. At most private banking groups this is done by assigning a private banking relationship manager to each client, who works with a team of professionals to collectively manage a client relationship.
Describe the typical structure of and services offered by a private banking? Structure and services The structure is based on that of a relationship manager. In this structure the needs of the customer is satisfied by one individual There are many services that are provided by the bank through the RM but some specifically detailed by the presentation were: Mortgages retail/commercial banking/cash mgmt. Investment mgmt Stocks, bonds, mutual funds Insurance services Trust services Retirement planning Private banking
Describe the typical structure of and services offered by a private banking?
Structure and services
The structure is based on that of a relationship manager. In this structure the needs of the customer is satisfied by one individual
There are many services that are provided by the bank through the RM but some specifically detailed by the presentation were:
Mortgages retail/commercial banking/cash mgmt. Investment mgmt Stocks, bonds, mutual funds Insurance services Trust services Retirement planning Private banking
What are some of the criteria for bank customers to qualify for private banking? Why are banks required to define the criteria?
What are some of the criteria for bank customers to qualify for private banking? Why are banks required to define the criteria?
- Criteria -> Although each bank is different in its requirements they are generally based on one or all of the following three factors:
Household income
Mutual of Omaha requires Household income >= $250,000
Net Worth
Mutual of Omaha requires net worth >= $1,000,000
Liquidity
Mutual of Omaha requires liquidity to be >= $500,000
Why define criteria
- Criteria must be defined so that you can clearly show that a member is in the private banking department for standardized reasons. Often times Private Banking clients are offered perks or other considerations that are not available to Non-Private Banking clients. These perks can include discounted loan rates, increased deposit rates, discounted fees, etc. Therfore, there is no ambiguaity or threat of discrimination.
What are the key, private banking target opportunities described by John Zaby? What is the largest loan product for most private banking departments?
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What are the top risks to private bank lending?
What are the top risks to private bank lending?
Loss of job or decline in business of Proprietor
Excessive Lifestyle
Leverage
Contingent liabilities
Divorce
Creative Estate Planning
Succession death or transferring of wealth
Gambling
What were some of the factors discussed while reviewing the private banking customer’s financial statements?
Review slides 11 - 18
What were some of the factors discussed while reviewing the private banking customer’s financial statements?
Review slides 11 - 18
