Most banks offer a private banking service that aims to provide special treatment for their best customers, many of whom are business owners and executives.
"To be a member of private banking, it's by invitation only," says Michael Mackin, senior vice president at Key Bank. "We try to treat our members like clients, not customers. We are trying to be an asset to our clients, and wanted to be treated the same way they would treat their accountant or attorney."
Private banking provides financial consulting as part of the bank's service.
"Each account is handled by a relationship manager," says Mackin. "Their job is to present clients with products such as loans and deposits, and to also to expose them to our insurance and brokerage services, trusts and money management capabilities. Our relationship managers help the customers through the web of the banking system."
In private banking, relationship managers should be familiar enough with clients to understand their needs and match the product to the need, rather than just push products.
"We want to be considered an advocate for our clients," says Mackin. "In some cases, someone else's product may make more sense than ours. We build trust with our clients by offering that competitive product. We push solutions, not products."
Clients deal with the same person all the time, and that person can call on a field of experts for specific advice if needed by the client.
Banks are reluctant to reveal the specific minimum requirements to qualify for private banking, but Mackin says the typical Key private banking client has a six-figure income and a net worth ranging from $500,000 to $10 million. In Key's case, there is a $225 membership fee, offset by better deposit rates and waivers on several fees. How to reach: www.keybank.com
The consulting role
The biggest difference private banking tries to make with customers is to play the role of consultant. Rather than just pushing a list of products to the masses and hoping the marketing messages get through to the right people, private banking focuses on identifying needs ahead of time.
"In private banking, we try to develop a financial plan for our clients," says Michael Mackin, senior vice president at Key Bank. "We sit down with the client and go through a series of questions like, 'What are your needs today?' 'What will they be in the future?' We then put together a solution for them. It really gives them a path to take off on to try to accomplish their goals."
Private bankers meet with the client throughout the year -- usually a minimum of two to three meetings --to stay current on needs and changes in the person's life.
In addition to special rates and free services, private banking clients may also receive perks such as an anytime hotline to call or the ability to conduct transactions after hours.