Those who find value in the services of a private bank are typically people who have been very successful at running their business and most likely have many disparate business interests and concerns. A private bank supports these business owners as a resource to help manage the varied financial aspects of their professional, and often their personal, lives.
“Private bank clients tend to have unusual or sophisticated financial needs,” says Ted Gouza, senior vice president, private banking region manager at the Huntington Private Bank, which is part of Huntington Bank. “They’re involved at a high level with multiple companies, usually have entrepreneurial ventures such as startups, and their cash flows are different than those found in typical banking relationships.”
Smart Business spoke with Gouza about private banks, who should use them and what benefit they offer.
Why might working with a private bank make sense for business owners?
Business owners working with a private bank are able, when there is a need, to make a call and talk to one person who can quickly provide the direction and advice they’re looking for. They are connected to someone who is proactive, someone who knows them. When they call, they don’t need to explain who they are because they’re talking with someone who understands their full financial situation so that when they share information, the private banker is able to connect it to the bigger picture.
Private bank clients need a trusted adviser to call who can provide a full array of wealth management needs — loans, deposits, money management, financial and estate planning, and insurance. Private bankers ensure that all of those needs are addressed.
How does a private bank fit within someone’s existing adviser network?
A private banker becomes another aspect of a person’s financial network, serving in the role of quarterback on a financial team, connecting with a person’s existing accountant, attorney and commercial banker to help clients transact effortlessly.
A private banker doesn’t provide legal or tax advice, but they can direct clients to the right place when it’s clear a request requires different expertise. For example, recent changes to the tax law may prompt a conversation about what individual effect those changes might have. The private banker wouldn’t give direct advice on how to react, but would advocate in front of a CPA and accountant to work through the best way forward.
The benefit of a private banker is that they have knowledge of their clients’ entire financial situation — personal and business — and they’re connected to the rest of their clients’ network.
What special value does a private bank bring to a business owner?
Private bankers provide a consultative approach. They loop in the advice of additional partners to help counsel clients and identify and discuss opportunities as they arise. This applies to both the client’s personal and business finances.
A private bank is with a business owner through every stage of their financial lifecycle, whether they’re just starting a new business or coordinating a succession plan or liquidity event, and guiding them through whatever comes next.
How can prospective clients determine if a private bank can meet their needs?
During the review process, the conversation should touch on how often meetings with the banker should occur and what are the expectations for the relationship. Determine the level of expertise and capabilities of the private bank, as well as the approach taken when working with clients. The choice really centers on the client’s personal preference and the private bank’s ability or willingness to customize service to the client.
Expertise aside, it all comes down to the personal relationship. It’s important that the prospective client is comfortable with the person they’re working with and that the private banker fits well with the rest of the client’s financial team.
A private bank has the unique ability to coordinate the sophisticated financial business conducted by a select type of professional. The relationship, when working effectively, complements a client’s entire team of advisers.
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