Personal accounts, commercial loans, trust funds, home loans — business owners can get lost in a complex financial web. Professionals who want to bundle their banking services and delegate their financial portfolio to an expert depend on private bankers.
“Your private banker is the quarterback of your entire banking relationship,” says Roseanne VanHoose, manager and senior vice president of private banking for the Western Reserve Region of Sky Bank. “A private banker is your first stop for anything you need in the financial arena.”
While many executives at large corporations and professionals like attorneys and physicians know about the convenience of private banking, mid-sized business owners are often unaware that they qualify for these specialized services.
Smart Business asked VanHoose what private banking means to busy entrepreneurs.
What services does private banking include? What does it mean to have a ‘private banker?’
Essentially, you can think of your private banker as a solutions switchboard. You are assigned to one person who devotes time to understanding your personal banking situation. This banker coordinates all of the services you need.
If you want to open a checking account for your daughter, one call to your private banker and he or she will make arrangements to prepare the necessary documents. Perhaps you want to exercise stock options with your company. A private banker will assemble that package with your employer, so all you have to do is make one phone call. If you want to buy a home, a private banker can arrange the financing. Or, if you own a business and you want to explore health care benefits for your employees, your private banker can connect you with a member of the bank’s insurance team to answer questions.
How does a business owner qualify for a private banking program?
The program is designed for executives, professionals and entrepreneurs whose lifestyles demand a higher level of banking services and products than typical bank retail programs usually offer. They must meet income and net-worth qualifications, because service is the cornerstone of private banking.
A large segment of private banking clientele includes professionals like physicians, accountants and attorneys. You don’t have to own a business to enroll in private banking; company executives also benefit from solution-based services.
What are some common misconceptions of private banking?
Many people assume that you must be a multimillionaire to take advantage of private banking services. This is actually not the case; we work with clients who are emerging in their fields. We also manage wealth for retired executives, who depend on our services to administer the funds they accumulated during their careers. There are times when clients meet the income requirement and not the net-worth prerequisite. Private banking is appropriate for business owners in various stages of wealth.
Besides the benefit of making one phone call for financial issues, why else do business owners choose private banking?
Time is the real value. Private bankers are problem solvers — and they know who to call when they don’t know the answers. Also, depending on where you bank, you can enjoy economical perks, such as free checking, sweep accounts and more sophisticated products. But mainly, business owners choose private banking because of exceptional service.
What is the difference between working with a private banker and a commercial lender? Is it appropriate for a business owner to consult with both bankers?
More mid-sized business owners are accustomed to dealing with commercial bankers, whose primary role is lending. Commercial bankers don’t handle the personal side. Private banking encompasses both. A private banker develops a financial needs analysis for each client, working in stages.
First, the banker will address basics like commercial depository accounts and personal checking. Then, he or she will ask more in-depth questions, such as: Do you have an estate plan or succession plan in place? If the owner is a physician or professional, the private banker also will handle commercial needs.
On the other hand, if the owner’s business is outside this realm, the private banker will connect him or her with a commercial banker who can manage the lending aspect of the relationship. You don’t have to switch your commercial banker if you already enjoy a great relationship. But by bringing on board a private banker to coordinate all your banking services, you will avoid making several phone calls for financial answers.
ROSEANNE VANHOOSE is manager and senior vice president of private banking for the Western Reserve region of Sky Bank. She can be reached at (330) 258-4444. For more information, visit www.skyfi.com.
