Private Banking Demystified: How a private banking relationship can simplify your financial life

Mark D. Thompson

Mark D. Thompson

September 25, 2018

Wealth Planning

 

 

 If you want fully integrated wealth management and banking solutions, with an experienced ‘quarterback’ who can provide personalized service to help grow and preserve your wealth, a private banking relationship could be the right choice for you. 

 

What is your time—and peace of mind—worth?

Time is a precious commodity for all of us. Whether at home or at work, time is too valuable to spend it waiting on “hold,” standing in line, or searching online for the perfect answer. It’s also too precious to be wasted trying to manage the myriad financial aspects of your life that need your regular attention. That’s why, as your life and finances become increasingly complex—and managing cash flow, investments, loans, mortgages, insurance, and legacy and estate planning consumes more of your valuable time—a private bank may be the answer.

What is a private bank?

In essence, a private bank lets you take the complexity out of your financial life, so you can devote your time to your family, your business and other priorities that are important to you. That’s because a private bank is the only financial firm that brings together banking, investing, personal wealth management, residential mortgages, commercial lending and treasury management all at the same time for both businesses and individuals. A private bank’s ability to integrate all of these services means they can grow with clients throughout their financial lives and deliver one bank, one company, to and for their clients.
 
And that’s what differentiates private banks from investment banks, retail banks, community banks and money managers. Very few institutions put it all together like a private bank does.

An integrated, holistic approach that brings it all together

At Cambridge Trust, for example, we take a holistic approach to managing our clients’ wealth. As bankers we understand how to tap the wealth in their business and their other assets. Plus we address their personal wealth management needs and family succession plans, and ultimately create a plan to distribute their wealth to charitable causes and to the next generation.
 
That’s an important aspect of our integrated approach too: We can focus not only on wealth management for an individual, but also on succession planning for the firm and legacy planning for the family.
 
For instance, when we were competing recently with a premier money manager/investment advisory firm for a significant wealth management account that involved a family-owned business, our ability to provide solutions across banking, wealth management, investing, commercial lending, and business and personal succession planning disciplines was a competitive advantage. The competitor could not easily offer business loans, mortgages or financing and had limited ability to create trusts for the family or the business. Their strength was limited to their investing and money management expertise.
 
It was important to this family that their wealth manager could provide leverage with a banking solution and would understand how having their wealth reside in their business related to their liquidity—and how that would be managed in the future.
 
In addition, our expertise in wealth management, investing and financial markets, as well as our ability to connect this business owner to the bank’s network of other experts, were all capabilities that this client now values in our new relationship.

A financial firm defined by its professionals and its clients

Over the years, I’ve often been asked, “What is the mystique of a private bank?” And I’ve always answered that question pretty simply: A private bank is defined by the expertise of its professionals and the success of the clients they serve.
 
A private bank should have great private bankers, loan officers, and experienced wealth management professionals. But it should also provide extraordinary client service, backed by the highest safety and soundness standards, robust digital technology and a broad array of financial solutions that are customized for each client’s individual and business needs.
 
Whether you’re just starting out and creating your wealth, or you’re looking for ways to grow and preserve it, you need to connect with skilled, experienced professionals from a variety of financial disciplines.
 
At Cambridge Trust the “quarterback” who helps you make those connections is your private banker. He or she is always working on your behalf to understand your complete financial picture and call the plays to get things done with other experts within and outside of the company. That typically involves:

  • collaborating with your attorney and other advisors to coordinate your plans with them and make sure they’re getting the information they need
  • acting as a partner at the table, offering input and advice based on your personal and business financial situation
  • introducing you to other professionals in our network that can help you with the non-financial matters that come up in life

Private banks are committed to helping clients build, grow and protect wealth through extraordinary service that can make life less complex. Whether they are Millennials just getting started, Gen-Xers in the prime of their wealth building years, or Baby Boomers getting ready to transfer their wealth to future generations or causes they care about, a private bank’s clients are usually busy creating wealth for themselves and their businesses.

On the business side

On the business side of the equation, people come to a private bank because they believe the bank will fully understand their business, and can help them grow, build, protect and transfer their wealth.

If you consider that:
  • 98% of U.S. businesses have fewer than 20 workers[1] 
  • at least half of all companies in the U.S. are family owned[2]
  • more than 50% of the working population (120 million individuals) works in a small business[3]
Then you can understand why the owners of these smaller firms would be looking for a financial partner who:
  • understands their business and their business needs
  • has expertise in handling privately held businesses in their specific industry
  • can help them gain access to the bank’s broad network of individuals and solutions to manage their money 

At Cambridge Trust, we work with innovative companies just starting out, established businesses that are growing and expanding, and fully mature multi-generational businesses that need succession planning for themselves and their families. We can help them continue to generate wealth for the firm’s ownership and their families.

Other business clients we serve come from the more than 68,000 professional service firms in the greater Boston region.[4] They are private partnerships, venture capital and private equity firms, and law and CPA firms. Each one has unique banking, finance, retirement, succession and legacy needs that we strive to fulfill.

On the personal side

I believe a private bank must have the ability to grow with their clients as individuals as well as businesses. At Cambridge Trust, for example, many of our relationships start with a client’s immediate need for a residential mortgage to buy their first home, to move up into a larger home, or even to sell their home in the suburbs before retiring and buying a condo to live downtown. But that relationship grows into helping them over the long term as their income grows and their wealth accumulates, and eventually, when they are ready to retire, and they have a potential “liquidity event.”  Our clients know we’re in it for the long run with them.

The extra element: Trust

Choosing the right private bank to manage your banking, investing, business financing, wealth management and wealth distribution needs involves many factors, not the least of which is whether you feel comfortable with the team that will support you.
 
But I think part of the “secret sauce” that Cambridge Trust offers—over and above the services, solutions and expertise that other private banks can provide too—is the level of trust and confidence our clients have in our ability to meet their needs and preserve and grow their assets.
 
We believe that feeling of trustworthiness must imbue everything we do for our clients, from a bank deposit transaction to a complex real estate partnership or business liquidity event. Building and maintaining a trusted relationship with each and every client is an essential part of who we are and the core value that guides everything we do.
 
We’d welcome the opportunity to earn your trust and help you build wealth wherever you may be in your financial life. Please contact one of our private bankers to learn more.

 
This article is for informational purposes only and should not be construed as investment or legal advice.