Hello guys,
Wanted to share some of my “insights” regarding private banking, although to be honest I really don’t understand it yet. So I had to cash out rather large sums coming from crypto. Most private banks rejected me but I could get a feeling of the “service”. Some examples:
- You can discuss asset allocation decisions with them and they kind of give you their “insight” or may warn you at least on wrongdoing
- PNB-Paribas rejected me even without speaking to me, I was really pissed off to be honest. Was surprised later that I got a call later which really helped me with cashing out. So, they forwarded my number without asking. In this case, it was rather a︀ favor!
- Pictet, made a very nice impression. Nice building. The people are kind off “interested”︁ in you. Also, here I had kind of a problem with another bank. Although I︂ was rejected, pictet did a call to the other bank and resolved the issue very︃ fast. They knew someone there.
- UBS offered fixed term deposits to other banks. You get︄ a tax benefit as far as I understand and a bit higher rate, even compared︅ to IBKR on short term. On the other hand they said, we see EUR/USD at︆ 0.9 and few months later they told me I should sell the dollar positions since︇ we expect EUR/USD and CHF/USD to go up, the oposite direction. So that shows that︈ they can’t really beat the market. They also had some interesting products like if you︉ want to buy some stock, you could buy some kind of structure product and get︊ interest rate if your limit price is not executed.
Anyway, I think the examples show︋ that they really try to solve your problems and use their network for it. Guess︌ it is kind of valuable. Also guess they might help you with selling assets or︍ firms. It seems that with the network it’s kind of possible for them.
On the︎ other hand, for pure asset allocation I highly doubt that they can do anything that️ justifies the fees. Especially it seems that they really like to sell their own funds. All together I’m really not sure what to think about it. Regarding just buying stock’s and so on it doesn’t make sense. Especially not sure what the benefits are in an “execution only” agreements (even here often the fees are 0.3% and the lowest I saw was 0.15%).
All together I don’t think they can beat a simple three-fund portfolio. But in a more complex situation it is worth it, I guess. Also, as I understand they offer tax advice that might prevent you from stupid mistakes.
PS: If I︀ got something wrong, please correct me. In my perspective the main benefits are: Tax advice︁ and access to the network (for selling or maybe investing, guess they might even help︂ with jobs and so on).
PPS: Regarding the network, a good tax consulting company may︃ have similar access and could consult you as well. So still not sure about the︄ advantage of a private bank...
