10 things to watch out of when...choosing a private banker

PUBLISHED : Sunday, 29 April, 2001, 12:00am
UPDATED : Sunday, 29 April, 2001, 12:00am
 

Growing numbers: In 1999, the number of high net-worth individuals in Asia increased to 1.7 million and their wealth grew by 22.7 per cent, faster than the rate of growth in North America and Europe, according to a study by Merrill Lynch and Gemini Consulting.


Private banks are eyeing a slice of the wealth pie and competition is strong, so weigh up what is on offer.


Do your homework: When you reach high net worth status, loosely defined as having in excess of US$1 million in liquid cash, it is most likely private bankers will be approaching you rather than the other way around. No one is above getting ripped off or misled.


Personal and business: Company issues, especially if you run a family-owned business, are as important as ensuring you have enough money to retire in the manner to which you have become accustomed.


Reputation: The credibility of some private banking institutions took a knock after the 1997 to 1998 financial crisis, as clients lost out due to margin calls and leveraged transactions. Remember the role of a private bank should be wealth preservation as well as wealth creation. You should be offered a range of investment options, including long-term capital growth to beat inflation.


Internet options: These days you can even open a discreet private banking account with offshore facilities over the Internet. Make sure the service offered is what you are looking for and do a background check. Swiss banks have faced money laundering allegations, and legitimate operators should protect their reputations.


Not all image: Globalisation means very few people conduct all their affairs within Hong Kong's borders. If you have amassed a certain amount of personal wealth and have a child studying overseas or a business division in another country, you are probably in need of a private banking service to create tailor-made tax or trustee solutions for you. Foreign nationals need help staying up to date with home policies.


Niche markets: Not all private banks offer a full range of services. Westpac Private Banking, for example, specialises in Australian property investments. Don't pay for services you don't need.


Personal touch: A one-on-one relationship with your banker is considered the foundation of any private banking service. You should be hearing from your banker on an individual basis. If you feel you are not communicating effectively, reconsider.


Existing relationships: Find out if the ties you have established with your accountant, lawyer or independent financial adviser during the leaner years can be carried through into any private banking relationship you develop.


On the way up: You may not be quite ready to qualify for a private banking service but institutions with vision should still be courting your patronage. Take a look at second-tier services offered by other banks - they tend to cater to those with more than HK$1 million.


Graphic: trigagwz


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