Tatler: why high-net-worth clients choose private banking

This article was written by Annabelle Spranklen for Tatler, and features Sally Tennant alongside Maya Prabhu of J.P. Morgan Private Bank and Michael Vlahovic of EFG Private Bank.

For the super-rich, choosing where to deposit and invest their money is a serious affair. High street banking is swapped in favour of private banking, an exclusive, highly-personalised way to manage funds for some of the UK’s wealthiest individuals and their families. Some of London’s most famous private banks don’t actually look like banks at all. With vast marble lobbies, private rooms and plush seating, these institutions are more like highly discreet member’s clubs, with VIP treatment and 24-hour concierge to help clients organise anything and everything.

Of course, there’s a criteria one needs to meet to become a client - something that recently came to light after private bank Coutt’s found itself in murky waters when it decided to suspend Nigel Farage’s bank account over his political views. The decision was subsequently reversed after public and government criticism but was a stark reminder of just how tenacious private banks can be with ensuring that clients are deemed suitable enough to bank with them.

So, what exactly does private banking really offer those wealthy enough to sign up?

‘A private bank essentially provides personalised banking and wealth management services to HNW and UHNW individuals,' says Sally Tennant, Founder of Acorn Capital Advisers. ‘Private banks focus exclusively on clients with substantial financial assets as opposed to retail banks that cater to the mass affluent.’ Tennant’s clients come to her for help when making financial decisions. ‘We provide strategic investment, family office and philanthropic advisory services, and act as an outsourced Private Office for a select group of families, helping clients to select the right private bank for them,’ she adds.

‘Our clients come to us to provide security during turbulent times, exceptional quality of service and a robust investment platform,’ says Maya Prabhu, head of Wealth Advisory, J.P. Morgan Private Bank. ‘The first thing that we ask clients is, ‘what do you want to achieve with your wealth?’ With a team of specialists, we define our client’s goals which tend to fall under specific themes: liquidity, lifestyle, legacy and growth. We then tailor a plan to help clients achieve the full potential that their wealth can create – whether they are just starting on their journey, or planning for future generations.’ Prabhu adds, ‘I concentrate on helping clients plan for the future, partnering with them and their families to work out what really matters to them, navigating clients through life’s various opportunities and curve balls.’

Michael Vlahovic, Head Of Private Banking at EFG Private Bank, tells Tatler, ‘Private banking offers an exclusive level of service, tailored to the unique needs of high-net-worth individuals. By providing a holistic approach to wealth management that covers real estate lending, deposit taking as well as investment management, we work closely with our clients to understand their goals, aspirations, as well as potential challenges.' Vlahovic adds, ‘Our expertise allows us to offer strategic solutions to complex financial questions, ensuring clients’ wealth is well managed and maintained for future generations. Helping private clients build sustainable wealth is a real responsibility. It requires private banks to have a vast network and expertise, offering unique investment opportunities, innovative strategies, and global insights, all designed to safeguard and grow their clients’ financial legacy.’

As well as specialised expertise around high-net-worths and the challenges that come with this, many private banks also offer the sort of rates that mainstream banks cannot compete with.

‘The biggest difference between private banking and retail banking is the personalised service and sophisticated financial solutions offered. Private banks provide access to exclusive investment opportunities, such as private equity, venture capital, and hedge funds, which retail banks typically do not offer. Private banks may also offer preferential rates on loans and deposits,’ says Tennant.

Naturally, these perks come at a cost and most private banks charge an ongoing monthly fee which is certainly higher than someone may pay for a premium account in a retail bank.

‘Clients need to be aware of all fees and costs involved, some of which may not be transparent,’ warns Tennant. She adds, ‘Clients need to trust that their relationship manager understands their financial goals and is aligned with their objectives. We like to ensure that banks have a full range of products and not just their own, to ensure that they can offer the solutions most suited to our client.’