A higher degree of service Featured

8:00pm EDT August 26, 2009

Business leaders often get so caught up in running their businesses that they neglect their personal finances.

But there is help available for overextended executives in the form of private banking, a comprehensive approach to personal financial management that gives you a single point of contact for all of your financial needs. It also provides quick and easy access to a local banking expert who will use his or her knowledge of your personal situation to deliver a customized solution.

“CEOs and business owners tend to focus on the day-to-day operations of their businesses,” says Brad Watson, senior vice president of private client services at First Place Bank. “Often, their personal finances get put on the back burner. Private banking can help mind the shop while you focus on your business.”

Smart Business spoke with Watson about how to build a private banking relationship to ensure your future financial success.

How do you qualify for personal banking services?

Most banks tend to segment clients differently, but generally, you’ll need to have at least $250,000 to $500,000 in banking assets to qualify for a private banking program. However, many banks will also look at emerging and affluent entrepreneurs who aren’t quite there yet but who are clearly on the path to being there.

How can using a private banker help you manage your finances?

Private banking goes well beyond checking, savings and money market accounts. A private banker will also offer you a wide array of services such as traditional depository products, treasury management, merchant services and foreign exchange.

Private bankers are also there to help you understand your current and future cash flow needs, how long it will take you to get out of debt, and how willing and able you are to save for the future. A private banker will help you ensure that both your short-term and long-term financial needs are met.

How can a company benefit from private banking lending options?

It depends on the type of business you have, but if your company has large cash flows and/or a need for cash management, private banking lending options can be highly beneficial. Not only that, a company can benefit from a private banker’s ability to customize service needs. Private bankers have the ability to underwrite, structure and approve loan requests in house, providing quick decisions and customized loans for clients.

How do you find the right personal banker for your needs?

Everyone will have a different focus, so you have to go in having some idea of what your needs are. The private banker will help you fully determine those needs, but be prepared nonetheless.

Ask a potential private banker questions such as, ‘Do you work with other clients similar to me? What is the lending limit of the bank? Do you have experience working with other people in my industry? How can you ensure that you’ll deliver what you say you will?’

You’ll also want to ask how many clients the private banker has. You want a private banker with experience, but you don’t want one who has so many clients that you just become a number.

The hierarchy of the bank is important, as well, because it shows you where the bank’s focus is. Many banks lead with whatever their strength is, so if you see a bank with a lot of commercial clients, it may focus more on that than on the private, personal side of its clients. But if you have an established banker who you can trust, one who is focused on you and your personal needs, you’ll have a true partner who can help you achieve any and all of your personal goals.

How important is it to find a banker who takes a holistic point of view?

Looking at banking from a holistic point of view is vital. Now more than ever, there are a lot of pitfalls in the marketplace — pensions are being reduced, benefits are being slashed or eliminated, and people are living longer, which on the surface sounds good, but the longer you live, the more money you have to spend.

Therefore, you have to make sure you work with a banker who has a grasp on your entire situation and will make sure everything works in harmony.

Generally, we all have the same goals — we want to send our children to college, retire comfortably and truly enjoy our golden years. But, on the other hand, everyone’s situation is different, and everyone has different tolerances and attitudes toward the market.

If your banker is looking at one specific piece of your finances and making recommendations on the entire situation, he or she is being very shortsighted and is not fully looking out for your best interests.

Again, you have to find a banker that you trust. You’re going to have to share all of your personal information with your banker and, in many ways, your future is in his or her hands.

Brad Watson is the senior vice president of private client services at First Place Bank. Reach him at BWatson@fpfc.net.