What is private banking? Is it reserved for only those who are wealthy enough to own a fleet of private planes? Absolutely not. Do not be mistaken. These programs are generally reserved for individuals with a high net worth, but that doesn’t mean only the one percent qualifies.
The term simply refers to a collection of wealth management services offered to people with substantial assets. The bank will offer this select group of clients financial solutions that require large investments and fiscal power.
Additionally, international travelers may find their private banking in Hong Kong easily transfers funds and benefits across borders.
The Myth of Astronomical Net Worth
You do not need to have millions in the bank to qualify for private banking. Of course, some of the most elite services may be invitation only based on accumulated wealth, but people with assets as low as $50,000 can find banks that are eager to work with them.
A more common threshold is around $250,000 in total assets. If you do own a private jet, you certainly qualify for many private programs. However, this astronomical level of wealth is not absolutely necessary.
Exclusive Benefits and Services
Naturally, private banking in Hong Kong and anywhere around the world has a long list of exclusive perks and services. The first and possibly most coveted is an unmatched level of privacy. The bank will not advertise your business dealings and keeps all record under heightened security.
Additionally, private accounts yield higher returns and typically out perform the market. The individualized one-on-on service with a carefully selected team of competent professionals is also a commonly praised benefit of this type of banking.
Paying for Those Perks
Banks, much like your business, are money-making enterprises, so you are probably wondering what the institution gains in return for the extra effort. Usually, these conglomerates will receive a small percentage of any assets you entrust to the bank. They also receive interest from large mortgages or other loans you acquire.
Furthermore, at this level, there is a high level of turnover amongst the tellers. This means you may have to work with someone new every few years instead of building a consistent relationship with one manager.
The Challenges and Obstacles
Some challenges of private banking in Hong Kong have existed since the inception of such programs, but many are the result of the recent financial crisis in 2008. In the aftermath of the fiscal meltdown, many international governing bodies implemented harsher restrictions and regulations on financial institutions.
This limits what the banks can offer as well as which personnel can advance in the system. As a result, there are relatively few highly trained professionals who are capable of managing private accounts.
Making the choice to switch to private banking in Hong Kong can be difficult, but it all comes down to the available services. Can you really use the financial solutions of the private sector?
For instance, if you are looking for a personal real estate loan over $1,000,000, a private bank is far more likely to approve it than your average commercial bank. Look at the options and choose what course is best for you and your assets.