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Private banking - 7/8 figures, white and safe

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manilobino

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Jun 15, 2021
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Hi,

I’m looking for a new home for my ETF holdings that have a 7-8‌ figure worth in EUR - currently it’s with an online broker but it’s not as‍ financially stable as a brick and mortar bank, although has better fees - but I’m⁠ willing to pay in fees if it means my funds are secure.

I was thinking⁤ to go to Swiss private banking, maybe UBS or the likes, which should have the⁣ best possible financial rating in my opinion, and to my recollection entailed a 0.6% or⁢ so yearly safekeeping fee.

My first priority - funds safety. Then - low fees. Then︀ - low complexity of opening an account (KYC).

Can anyone recommend a bank for this︁ purpose, in or outside of Switzerland, hopefully with some scientific reasoning (financial rating etc) as︂ to why it’s a good choice?
 
Hey,

It's not only Swiss that can give you a sense of safety. Look at‌ Liechtenstein as well. I believe Bendura bank could be a good fit for you.

There are more alternatives than this, that would be cheaper (for example, you wouldn't have to‍ pay a balance fee), but it's a matter of what are your goals.

If you⁠ wish, drop me an email., happy to give you some directions.
 
I think I explained already that under EU rules any assets held in a Custody‌ account with a bank are ring fenced and cannot form part of any bankruptcy proceedings.‍ So if you go EU bank route you will be fine.

Switzerland not being in⁠ EU has its own protection system. I bank with UBS and won't describe the service⁤ as great, I hold bonds with them and having a private banker call you ever⁣ so often to tell you why your portfolio is sh1t (despite being up) and trying⁢ to sell you some BS product may not appeal to you. Stability wise UBS was︀ bailed out by Swiss government during 2008 financial crisis and Credit Suisse had to take︁ money from Qatar to survive. Swiss banks are not the conservative stable institutions they used︂ to be. So do not even bother with small Swiss banks as their is a︃ lot of consolidation in in industry going on 🙁.

I would personal just pick an︄ affordable bank in EU. If you want top quality and ease of opening then BGL BNP Paribas in Luxembourg as you can open online depending on your country. If you︅ want free custody however then Medirect Bank in Malta might be interesting. I once used︆ them. Otherwise battle every day like I do with my Swiss banks and endless KYC︇ form filling even post opening.
 
Yes you need‌ to call them depending on your country. But 7-8 figure deposit/transfer and no funny nationality‍ or country of residence and you should be fine.

Depends on nationality and⁤ residence. There is not a one size fits all for non-EU residents. Its a risk⁣ based approach most banks will adopt for non-EU persons 😕.
 
First of all, it is better to go with GSIB banks. They're too big to‌ fail that's why governments probably protect them in case of any problem: https://www.fsb.org/wp-content/uploads/P111120.pdf

UBS is‍ expensive and not worth it especially if you have the knowledge to manage your money.⁠ My UBS private banker regularly calls me and tries to convince me to invest in⁤ UBS products but I only hold cash positions with UBS.

Credit Suisse has a much⁣ better web/mobile banking system and infrastructure than UBS also a little bit cheaper but UBS⁢ is financially more stable than CS.

You can go with a safe broker like IB/Saxo/Swissqoute︀ and invest in safe ETFs like IGLA. This should be safer than keeping cash in︁ a bank.
 
Thank you!
Can you provide a reference to those EU rules?
I assume⁠ that it will be good to stick to a EU bank that has a high⁤ enough financial rating, while maintaining low fees.
Didn’t know that history︅ RE UBS and CS, interesting… so they aren’t as finanvially strong as I thought.
Thanks
 
If you buy ETF via IB then it will be held with a custodian bank. It‍ means in case of any problem like bankruptcy, your assets should remain safe. The same⁠ applies to brick and mortar banks. For ex: if you buy ETF with UBS, it⁤ doesn't mean your assets will hold with UBS.

Yes they don't have a good credit⁣ rating(BBB+). I like IB because they're a publicly traded company and that's why they regulated⁢ better and they have to comply with more strict rules. IB also offers insurance to︀ accounts up to $30M and the insurance company is Lloyd's Bank.
 
I agree with the first part of this statement. I would⁣ not trust UBS or Credit Suisse any more than I trust the big American or⁢ European banks. In fact, if you examine banking history you will discover that UBS and︀ Credit Suisse were widely responsible for the destruction of privacy in the Swiss banking system︁ through their incompetence and by acting like other too big to fail Western banks.

I disagree with not using smaller Swiss banks, although Martin may know more than I do.︂ If I was the OP, I would target small to medium sized banks in Switzerland︃ and Liechtenstein (because of the long culture of privacy in those countries), but carefully compare︄ the financial statements for each bank. Then select a few superstars. Doing a financial︅ analysis of a bank is much simpler than it sounds and it often relies on︆ just a handful of ratios. Simon Black has written extensively on this topic if you︇ Google the topic.

https://www.sovereignman.com/intern...-to-tell-if-your-bank-is-actually-safe-24978/
 
Very true,
Even some liquid and Overnight ETF are also there .
It is best practice for protect your Assets from any bad things
 
Then the real question should be - which custodian bank does IB use, and what is⁤ its financial rating?
 
This is valid for institutional investor,
I’m an individual‌ investor. I read somewhere that for individual investors IB acts as the depositor/custodian which means‍ the risk stays with IB.
 
So the bank credit rating does not matter at all - but only⁠ that of the depository/custodian bank that the bank uses?

i.e. would you be just as⁤ comfortable investing via two banks, one BBB and the other AA, as long as both⁣ use e.g. Citibank Europe as the custodian bank?

Also, I wonder - what would stop⁢ a bank from promising to use one custodian just to attract a big investment, and︀ then use another which is cheaper for the bank. I assume that it’s less likely︁ to happen with a higher rated bank vs. a lower rated one.

I definitely don’t want periodic KYC 🙂 seeings as this is a norm with Swiss bank according︇ to you and others in this thread, I’m fine without the Swiss banking option.

About BGL BNP Paribas - can hou elaborate a bit on what you mean by top︈ quality in their case? (Aside the high rating)

And a generic question - would you︉ be comfortable investing an entire sum with one bank or do you recommend spreading to︊ different accounts? (if spreading, makes sense to check and verify that the different banks use︋ different custodians)
 
I discussed it here 3 years ago. You can examine the Bank Recovery and Resolution Directive‌ 2014/59/EU. See Article 44(2)(c).


(c)any liability that arises by virtue of the holding‍ by the institution or entity referred to in point (b), (c) or (d) of Article⁠ 1(1) of this Directive of client assets or client money including client assets or client⁤ money held on behalf of UCITS as defined in Article 1(2) of Directive 2009/65/EC or⁣ of AIFs as defined in point (a) of Article 4(1) of Directive 2011/61/EU of the⁢ European Parliament and of the Council (31), provided that such a client is protected︀ under the applicable insolvency law;



Yes that is pretty much it.

Whether it falls under EU BRRD is what︅ matters. Lehman Brothers was 'A' rated days before it collapsed so not 100% sold on︆ credit ratings....lol.

Good service.

As you may not know I hold a ton of accounts between banks︋ and EMI's. I think that answers the question.
 
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