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Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management

City:Northbrook

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Blog - Does Goldman Sachs really need a Private Bank?

Private Banks are confusing to investors

| BY Catherine McBreen

Goldman Sachs has announced that it is going to focus on its private banking services to high net worth investors.  Part of those services will include making loans to the corporations of these already wealthy individuals.  Additionally, it is inferred that other "private banking services" will also be made available.

But what is private banking?  It sounds like an exclusive club offered only to the best clients, however, how it is defined differs radically by institution.  For example, in many banking organizations private banking is really linked to corporate lending.  If your company takes out a loan from the bank, the executives will be eligible for "private banking services".  Those services, however, generally include preferred checking and credit card rates.

As a young person I assumed private banking occurred in small rooms full of mahogany and marble.  If I was ever fortunate enough to qualify for private banking, I assumed that someone would invest all of the assets of my multiple trusts, pay all of my bills and maybe even walk my dog.  But in most banking organizations, private banking and trust are in separate areas of the bank and generally do not have strong relationships.  Add investment management to the mix...and few banks do it well.

Reality also taught me that private banking can be offered to those much lower on the wealth scale than the mahogany room bracket.  My husband works for a law firm and as such we are "private banking" customers.  Other than having the words on my checks, it really doesn't mean much to me.  Recently I have been able to develop an online relationship with my alleged private banker, so that has been somewhat helpful.

But if anyone offers mahogany room marble table private banking, you would think it would be Goldman Sachs.  Despite the fact that this service is offered, do you think investors really care?

Spectrem has conducted research for many years with investors regarding their opinions of the terms "wealth management" and "private banking".  This research is generally conducted with households with over $1 million.  In most cases, investors don't believe they are wealthy enough to qualify for "wealth management" or "private banking", despite the size of their portfolio.  Only 34 percent of investors find the term "wealth management" appealing.  Only 2 percent consider a "private banker" to be their primary advisor.  That changes, however, with wealth.  Those with more than $25 million of net worth find that Private Banks have Talented Advisors and Staff and are Experts in Wealth Management.  In fact, 13 percent of those with more than $25 million will identify a Private Banker as their Primary Advisor.  (That compares to 34 percent who identify a Full Service Broker as their Primary Advisor).

So, does Goldman Sachs need a Private Bank?  The reality is that Goldman Sachs has probably done a better job of providing mahogany room marble table services to its wealthy clients than most of the other providers even without a private bank.  Maybe the reality is that retail banks should stop calling enhanced checking services Private Banking and be realistic about what they are really offering.



About the Author


Catherine McBreen



Catherine S. McBreen is President of Millionaire Corner.  McBreen plans and develops content for Millionaire Corner.  Catherine balances editorial content to meet the informational needs of both new and seasoned investors.  She designs special monthly surveys on topical issues affecting the economic environment.

McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law.  She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.

Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences.  She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth.  Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.

McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)

Catherine is the mother of four and is involved in many school and community events.