During uncertain economic times, business owners often find that a private
banker’s holistic approach to their financial needs might provide the difference
between success and failure. Private
bankers are most effective when they take a
360-degree view of a client’s personal and
business goals before recommending customized solutions.
Most personal bankers have the ability to
offer products and services that meet clients’
needs for business succession planning, tax
planning, investment growth, business financing or estate planning, but that’s only
part of the success equation. A personal
banker with little authority or autonomy to
act or your behalf might compromise the
results you need. It’s important for clients to
inquire not only about the availability of services, but how the financial institution is
structured, before selecting a private banker.
“Some financial institutions merely use private bankers as a means to gather assets,
and some bankers only look at the personal
investment side of the financial equation,”
says Mark Rhein, Senior Vice President of
Private Banking at Fifth Third Bank (Tampa
Bay). “Clients only stand to benefit from a
personal banking relationship when the
banker understands what you’re striving to
accomplish in all areas of your life, has an
intimate knowledge of how those needs are
intertwined and is empowered to act on
your behalf.”
Smart Business spoke with Rhein about
how CEOs can achieve a competitive advantage through a private banking relationship.
What is private banking?
Private banking is a comprehensive, advisory approach to personal financial management that gives clients a single point of contact for all of their financial needs. Private
bankers work closely with their clients to
provide customized credit and cash management services that typically include: checking and money market accounts, certificates
of deposit, lines of credit, mortgages, credit
cards, as well as investment management for
stock and bond portfolios. They also act as
the liaison between clients and the other
specialized wealth management service within the bank, such as trust and estate-planning services.
What business advantages does a private
banking relationship offer to CEOs?
Private banking should offer you quick and
easy access to a local expert who can use his
or her intimate knowledge of what you’re
striving to accomplish in your business to
tailor a comprehensive customized solution.
For example, let’s say you want to launch a
company expansion into Hong Kong. Your
banker must comply with all banking regulations regarding the transfer of funds in and
out of the country. Your private banker
should be familiar with your sources of
income and the regulatory environment surrounding wire transfers to and from Hong
Kong and should be able to expedite the
flow of international transactions. Through
this type of service, CEOs can expand their
business more quickly, and having a single
contact for communications and accountability gives CEOs peace of mind.
Why does the hierarchy and structure of the
banking institution matter?
When the bank utilizes a locally based
operating model, the personal banker has much more autonomy to act on behalf of his
clients and use his knowledge of the local
marketplace to make customized recommendations. In fact, at Fifth Third Bank,
while we use the same global products as
other institutions, we just tailor them so they
have a local feel. Having an established,
trusted local relationship often means shorter response times, faster solutions and
greater flexibility in meeting the client’s
needs.
Why is a holistic view to account management beneficial?
Individuals who qualify for private banking
are multidimensional people, so they need
multidimensional solutions. For example,
let’s say you are planning to retire in the next
few years and perhaps you’re trying to save
for your children’s or grandchildren’s educations. Given those objectives, you’ll need to
create an effective business succession plan
that will pass your company along to your
children, while still providing a retirement
income for you and your spouse. Achieving
those goals might require greater asset protection, more insurance or the ability to save
a greater portion of your income through tax
reduction strategies.
What are the financial qualifications for personal banking?
Most individuals that qualify for private
banking have a minimum of $350,000 to
$400,000 in annual household income and $1
million in investment assets. There’s no fee
for using the service and clients often benefit from preferred rates on savings and lending programs. Of course, one of the main
benefits is the personalized service. At Fifth
Third Bank, our personal bankers even
make house calls on weekends and
evenings, so we can accommodate the busy
schedule and needs of our local CEOs.
MARK RHEIN is Senior Vice President of Private Banking for
Fifth Third Bank (Tampa Bay). Reach him at [email protected]
or (813) 306-2497.