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The McKinsey & Company brings you today to the heart of private banking, or private banking. Very good reading. Now kenny lam hold a very important place here being the Partner and Asia Head of Private Banking & Wealth Management Practice, McKinsey & Company.
Panorama of the private bank
The private banking universe is made up of different types of players: banking players, management companies and family offices.
Among the banks, there are pure players, which are only private management, and private banks, subsidiaries of retail banks attached to major banking groups.
The principle of private banking is to manage the wealth of a wealthy clientele, particularly in terms of financial management, asset allocation and taxation.
Who are the clients?
There are two main types of clients: entrepreneurs who have transformed all or part of their professional heritage into personal wealth, and clients who benefit from family inheritances. In France, there are more and more entrepreneurs among the customers.
What are the grades?
The more seniority you have, the more you have to work on files of significant size, involving complex clients. With experience, we move towards a team manager role. According to the banks, managers can supervise between four and six bankers, in addition to support functions such as assistants. It also happens to include the portfolio managers in the team.
This is not a profession in which there is a rapid hierarchical evolution. We evolve according to the development of its client portfolio. The more assets you have under management, the more income you generate and the more weight you have in the structure.
What are the major players in Asia and in the world?
Private banks are classified according to the amount of assets under management. UBS is by far the world’s number 1. In France, it is one of the main actors without being the most important. Wells Fargo is also one of the largest private banks in the world while it is not present in France.
In Asia, in terms of asset management, private banking subsidiaries of retail banks, have the largest volumes of assets under management.
What products do you offer to customers?
In terms of management, we offer clients of the unlisted, such as real estate or private equity and the side, like stocks, bonds, commodities. Credit is also an important point of the offer.
The second pillar of the relationship is tax and wealth advice. For any management and allocation decision, the tax impact is at least as important as the proposed product.
Private banking on a daily basis
Private banking is a large sector with many different trades. To give you an example, in a private bank, the bankers will represent perhaps 10% to 20% of the maximum number. There are many other professions: heritage engineer, portfolio manager, structure, corporate advisor or credit advisor. There are of course also middle and back office functions, compliance and legal functions.
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