What exactly is a private bank / private banking?

[catt]

I have been approached by Fortis Bank which is a private bank with an excellent credit rating. I'm wondering whether to return the call....mmm.... Does anyone know what precisely a private bank is and what it offers?

Is money on deposit with them any safer than with the banks and building societies where its safety is guaranteed up to £35,000 with any institution. And are interest rates comparable? Or do they hope to "professionally" run my investments? (No chance!)

I have a larger holding. I thought about splitting it between a few banks up to the maximum safe threshold but it seems a bit bothersome.

So what do the very rich do?

 

[Directional]

Private banks are banks that are not incorporated. A non-incorporated bank is owned by either an individual or a general partner(s).

usually private banking is more about the personal services and approach they provide, in particular with regards to wealth management. AFAIK there is no additional protections are afforded.

 

[catt]

Thanks Arbitrageur!

So how do the super rich ensure their money is safe? Where do they lodge it?

 

[Phil Mibbutz]

Thanks Arbitrageur!

So how do the super rich ensure their money is safe? Where do they lodge it?

Northern Rock?

 

[0007]

Thanks Arbitrageur!

So how do the super rich ensure their money is safe? Where do they lodge it?

Can't speak for the race in general but I know of at least one super-rich (we're talking millions here - and it's not me!) who entrust to a top-notch firm of financial advisers who invest in very boring mundane but relatively safe funds / gilts etc etc. Allocation for clients is done according to investor's requirements in relation to risk & return - and I do know that much time, effort and expertise is expended. Just like any sensible person would look after their money, presumably.

 

[donaldduke]

Thanks Arbitrageur!
So how do the super rich ensure their money is safe? Where do they lodge it?

If you need access to the cash quickly you can buy T-Bills.

Treasury bills for ordinary folks | Wise Bread

There must be some uk equivalent ..

 

[Bagehot]

The super rich will actually have their own private offices with a personally employed team to manage their investments. I had a look at working in one in Geneva - about five people whose job it was to manage an old family's money across a range of asset classes. The 'merely' rich have to make do with commercial private banking, where the same services are offered on a larger scale. Its far more about wealth management, so they are after your liquid assets to invest on your behalf (and is how they make their money) - if all you want is a 100% secure deposit account they won't really be interested.

If I just wanted security on deposits over the £35k g'tee, I'd either spread it around, or put it all in Northern Rock which is now as safe as a government gilt.