(This article was last updated on March 3, 2023.)
Best private banks for high net worth individuals in the UK – that will be the topic of today’s article.
While the banks we will discuss herein aren’t private in the traditional sense, they offer the best private banking in the UK.
Nothing written here should be considered as financial advice or a solicitation to invest.
If you want to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).
Consigliamo alla maggior parte dei ricchi locali e degli espatriati di investire all'estero, e noi possiamo aiutarli.
Che cos'è il Private Banking?
Private banking is a complex of financial and non-financial services offered by banks to VIP clients. It includes an individual service system, separated within banks into a separate line of business.
Private banking is the most information-closed market. Interest rates and terms of service are determined by banks individually for each VIP client. Tariffs are not published and are disclosed by credit institutions at a personal meeting.
But, as a rule, the higher the status of such a client and the greater his capital, the wider the range of privileged services are provided by the bank. This is within the framework of private banking.
So, private banking is an exclusive banking service designed for clients with large capital. It represents a professional integrated approach to private gestione patrimoniale and high standards of customer service.
Private bankers offer customized advice on investments, estate planning, and tax management. They also provide access to exclusive investment opportunities, such as hedge funds and private equity. Clients typically receive a higher level of service and attention than regular banking customers.
Banking services inherently contain all the classic products of a credit institution, only on the best, individual terms.
Il investment service involves the placement of client funds in mutual funds (mutual funds), general banking management funds, trust management, accumulative life insurance instruments, alternative investments (wine collections, investments in jewelry, etc.).
Advisory services cover legal and investment issues, including on international market instruments. In addition, banks provide assistance in optimizing taxation, choosing insurance products, assisting clients in opening accounts and deposits in foreign banks, etc.
Private banking is often associated with confidentiality and discretion to protect clients’ privacy. It is a lucrative business, with fees often based on a percentage of the client’s assets under management.
How did private banking start?
Private banking was originated in Switzerland more than two centuries ago as an individual service for high-net-worth individuals. In the process of development of the banking sector, it became a separate institution of banking services. It implying the highest level of reliability and quality of services provided.
Classic Private Banking is the management of the capital of the client and his family. Its main goal is to preserve and increase the personal capital of the Client. In addition to this, within the framework of private banking, the bank can ensure the satisfaction of the accompanying needs of the clients by providing them with non-financial services.
In the post-Soviet space, such service appeared relatively recently and implies individual service for VIP clients.
Who is considered a high net worth individual or VIP?
In the context of private banking and credit institutions, becoming a VIP typically means having a high patrimonio netto.
In credit institutions, the lower threshold and requirements for entering the VIP group may vary.
In some banks, the client receives this status by opening a deposit for a certain amount.
In other credit institutions, in order to become a member of the VIP Client program, it is necessary to deposit to current accounts. One must also have investable assets, usually in the millions of dollars. Moreover, an average monthly balance of at least a certain amount in US dollars must be maintained.
Some private banks and credit institutions may also consider other factors. These include the client’s potential for future business growth or their professional connections and influence.
To become a VIP client, one can start by researching and comparing different private banks and credit institutions that cater to high-net-worth individuals. This may include looking into the services and benefits that each institution offers, such as personalized consulenza sugli investimenti, access to exclusive investment opportunities, and customized financial solutions.
Privileged clients receive a number of additional features and services, such as a variety of club privileges, assistance in booking hotels, organizing travel, etc.
Servicing of status clients within the framework of private banking is carried out in separate, comfortable divisions of the bank. Each VIP-user is assigned a personal manager who individually solves all his financial issues at any time, and if necessary, makes trips to him.
It’s important to note that being a VIP client comes with added benefits, but also additional responsibilities. These may include meeting certain investment minimums and being comfortable with the level of risk involved in certain investments.
Additionally, VIP clients are typically expected to maintain a high level of engagement and communication with their private banker or adviser.
How is private banking different from other banking services?
Private banking differs from ordinary banking services in terms of comfort. It provides a higher level of service and attention than regular banking services.
The client can interact with the bank in the way and at the time that is most convenient for him. Each VIP client is assigned a personal manager, who is obliged to be within telephone reach around the clock and resolve all issues of the client. The client can call at any time and inquire about the state of his investment portfolio.
If necessary, the manager can organize the delivery of a large amount of cash to the home or go on a business trip on the client’s business.
Private banking caters exclusively to high net worth individuals, providing personalized financial solutions and services that meet their unique needs. In contrast, retail banking serves a broader customer base. Its services are often more transactional and less personalized. It offers more standardized products and services, such as checking and savings accounts, loans, and credit cards.
Moreover, private banking often offers access to exclusive opportunità di investimento that are not available to regular banking customers. With private banking, the client can receive all the necessary services in one place. These services are usually dispersed in different areas: in the stock market, real estate market, antiques, etc.
Private banking offers a more complex approach, in which everything disparate services are collected in a single portfolio.
As financial instruments within the framework of private banking, clients can be offered:
- deposit operations;
- investing in the stock market through mutual funds;
- trust management;
- investment in real estate;
- participation in direct investment funds and venture projects;
- purchase of precious metals;
- options or futures contracts for various types of products;
- operations related to settlement and cash services: conversion, maintenance of demand accounts, opening and closing of current accounts; currency control operations;
- interbank transfers;
- opening accounts in foreign banks;
- issue of credit and other bank cards;
- insurance of property, health, risks, etc.
In contrast, retail banking services typically offer more traditional opzioni di investimento, such as mutual funds and stocks.
Private banking is often associated with confidentiality and discretion to protect clients’ privacy. This may include measures such as non-disclosure agreements and secure communication channels. In contrast, retail banking services are typically more transparent and public-facing.
It is worth noting that each bank has its own VIP clients who can count on a special attitude towards their person. However, such relations, as a rule, are not formalized and are based solely on oral agreements. Unlike these informal relations, private banking is a separate area of banking activity, a specially built system for providing services.
Best Private Banks for High Net Worth Individuals: UK Banking Background
Banking in the UK is a highly regulated and competitive industry that serves a diverse range of customers. The UK banking sector consists of a number of private British banks, international banks, and building societies.
The UK banking sector is dominated by large retail banks such as Barclays, HSBC, Lloyds Banking Group, and Royal Bank of Scotland. These banks offer a range of products and services, including savings accounts, loans, mortgages, credit cards, and insurance.
In addition to retail banking, the UK also has a thriving investment banking sector, which provides services such as underwriting, mergers and acquisitions, and securities trading. This sector is dominated by global banks such as JPMorgan, Goldman Sachs, and Morgan Stanley, which have a strong presence in the UK.
The UK banking industry is highly regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), which oversee the conduct and stability of the sector. The FCA regulates the conduct of banks and other financial institutions, while the PRA is responsible for maintaining the stability of the financial system.
To ensure the safety and security of customer deposits, the UK has a Financial Services Compensation Scheme (FSCS). It provides protection for up to 85,000 pounds per person per institution or 170,000 pounds for joint accounts in the event of a bank failure.
The UK has seen strong growth in online and mobile banking in recent years. However, physical banking remains popular and there are still around 20,000 branches in the UK.
The country’s central bank is the Bank of England, which has been state-owned since 1946.
Best Private Banks for High Net Worth Individuals: Banking Services in the UK
Banking in the UK includes the following services:
Current Accounts
Current accounts are the most basic type of account offered by banks, providing customers with access to their money for everyday transactions. Banks in the UK offer a range of current accounts, including basic accounts, standard accounts, and premium accounts, each with varying levels of features and benefits.
Loans and Overdrafts
Loans and overdrafts are a form of credit provided by banks to help customers finance large purchases or unexpected expenses. Personal loans are available for things like home improvement, car purchase, and debt consolidation.
These services come with varying tassi di interesse and terms depending on the customer’s credit history and financial situation. Most banks also offer short and long term overdrafts.
Mutui
Mortgages are loans provided by banks to help customers buy a home. These loans come with a fixed or variable interest rate and are typically repaid over a long-term period of up to 30 years. Many banks offer mortgages in the UK, including first-time buyer mortgages and let-to-let mortgages to customers who meet their criteria.
Savings and Investments
Savings and investments are offered by banks to help customers grow their wealth over time. These services include savings accounts and investment portfolios, with varying levels of risk and return depending on the customer’s investment goals and risk tolerance.
Investment options may include placing money in funds, bonds, stocks or UK pension plans.
Assicurazione
Insurance services provided by banks include home insurance, car insurance, travel insurance, and life insurance. These services are designed to provide customers with financial protection against unexpected events such as accidents, illness, or death.
Many banks offer insurance policies in the UK in areas such as home insurance, life insurance, travel insurance and car insurance.
Digital and Mobile Banking
Digital banking and mobile banking are popular services offered by banks in the UK. These services allow customers to manage their accounts, make payments, and transfer funds from their mobile devices or computers. Internet banking is available at most banks for customers who want a more convenient way to keep track of their finances.
Major UK banks now offer mobile banking apps so that customers can access accounts and make payments from their mobile phones and tablets.
Business Banking
Business banking services are offered by banks to help businesses manage their finances, including cash flow management, invoicing, and payroll services. These services also include business loans and credit facilities to help businesses grow and expand.
There are a range of banking solutions available for those starting a business in the UK or becoming a freelancer, such as loans, insurance, and business banking advice.
Services for Foreign Citizens
Many banking service providers offer products, services, and account options for foreign residents and non-residents. Banks in the UK also provide specialized services, including international money transfers, multi-currency accounts, and currency exchange services. These services are designed to make it easier for foreign clients to manage their finances while living or doing business in the UK.
Best Private Banks for High Net Worth Individuals: Bank Charges in the UK
What are the typical fees?
Banking fees in the UK vary between different banking providers, so it’s a good idea to shop around and find the best deal. You must be able to access the list of fees on the bank’s website and they must provide you with full details of the costs when opening a UK bank account.
These charges can include account maintenance fees, transaction fees, overdraft fees, and late payment fees.
Account Maintenance Fees
Account maintenance fees are charged by some banks for the upkeep of a customer’s account. These fees are typically charged on a monthly or annual basis and vary depending on the type of account and the bank providing the service.
Transaction Fees
These are charged for specific transactions, such as using an ATM, making a wire transfer, or depositing a check. These fees vary depending on the bank and the type of transaction being performed.
Overdraft Fees
Charged when a customer spends more money than is available in their account. These fees can be quite high and can accumulate quickly, resulting in a significant amount of debt for the customer. The overdraft is usually charged at the daily rate for each day of the overdraft.
Late Payment Fees
These are charged when a customer fails to make a payment on time. These fees can be charged for credit card payments, loan payments, or mortgage payments.
Other Fees and Charges
Many standard checking accounts are free to use, although some may charge a small monthly or yearly administration fee. This is especially true for some higher tier and premium accounts.
Using a debit card and ATM is usually free, while credit card charges can include an annual percentage rate (APR) fee, which Forbes said is currently at about 21%. There is a balance transfer fee of around 3% if you change cards. Plus, there are annual fees which can range from free to 400 pounds a year for some premium cards.
The cost of loans and mortgages in UK banks will depend on the annual interest rate, and additional fees may apply. International money transfers to banks in foreign currencies usually start at around 10 pounds per transaction, but for larger amounts, it will be higher.
Best Private Banks for High Net Worth Individuals: Offshore Banking in the UK
Offshore banking in the UK refers to the practice of holding bank accounts and conducting financial transactions in a jurisdiction outside the UK, typically in a tax haven or low-tax country. Offshore banking can offer several benefits to UK residents, including increased privacy, tax benefits, and access to a wider range of financial services.
Expats who live in the UK can also think that setting up an international offshore bank account is one of the great ways to manage and keep track of their finances. It is possible to open an international offshore account in the UK while working or being abroad.
Offshore accounts are available in pounds sterling, euros, and US dollars. They usually require larger deposits than standard bank accounts.
What are the advantages and disadvantages of offshore banking in the UK?
Pros
One of the main benefits of offshore banking is increased privacy. By holding assets in an offshore account, individuals can keep their financial affairs private from the UK government and other third parties. This can be particularly appealing to those who value their financial privacy or who are concerned about the security of their assets.
Offshore banking can also offer significant tax benefits. Many offshore jurisdictions have favorable tax laws that can help individuals reduce their tax liabilities. For example, some jurisdictions may offer lower income tax rates, reduced imposta sulle plusvalenze, or no inheritance tax.
Another advantage of offshore banking is access to a wider range of financial services. Many offshore banks offer specialized financial products and services that may not be available in the UK, such as international money transfers, foreign currency accounts, and offshore investment opportunities.
Besides, offshore banking for expats offers more convenience. By holding an offshore account, expats can avoid the need to transfer money between different countries and currencies. This can help simplify their financial affairs and make it easier to manage their finances across borders.
Offshore banking can also offer lower costs compared to traditional UK banking. Many offshore banks offer competitive interest rates and lower fees compared to UK banks, which can help expats save money on banking fees and other financial costs.
Cons
Offshore banking for expats also comes with some risks and potential drawbacks. One of the main risks is the potential for financial fraud and scams. Expats should be careful to only work with reputable offshore banks and financial institutions to avoid falling victim to scams or other fraudulent activities.
Another potential risk is the possibility of political instability or economic turmoil in the offshore jurisdiction. This could result in the freezing or seizure of assets held in offshore accounts, making it difficult or impossible for expats to access their funds.
What banks are available in the UK?
There are several banks in the UK to choose from, each offering specific packages including services for foreigners. The most popular UK banks have their branches on high streets across the country and are also capable to offer online and mobile services.
Most banks are open from 9 a.m. to 4 p.m.
Best Private Banks for High Net Worth Individuals: Barclays Bank
Barclays was founded in 1690 in London as a goldsmith banking business by John Freame and Thomas Gould. The business was named Barclays after Freame’s son-in-law, James Barclay, who became a partner in the business in 1736.
In the early years of its operation, Barclays primarily provided banking services to merchants and traders in London. However, over time the bank expanded both its operations and geographical reach.
In 1896, Barclays became a public limited company and issued shares on the London Stock Exchange. In the same year, the bank opened its first branch outside of London in Southampton, England.
In 1967, it became the first UK bank to install an automated teller machine (ATM).
In the 1980s, the bank also developed its investment banking operations and became one of the leading players in the London financial markets.
In 2008, Barclays acquired the North American investment banking and capital markets businesses of Lehman Brothers, which had filed for bankruptcy. This acquisition helped to establish Barclays as a major player in the US investment banking market.
In recent years, Barclays has continued to expand its operations and services, focusing on digital banking and expanding its wealth management and investment services. In 2021, Barclays acquired the US-based financial planning and investment management firm, Waverly Advisors, further expanding its global wealth management services.
Barclays has a market cap of 27.23 billion pounds as of the time of update, per MarketWatch data.
Is Barclays listed on an exchange?
Barclays is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It is also listed on the New York Stock Exchange in the form of American Depositary Receipts (ADRs).
The FTSE 100 is an index of the top 100 companies listed on the London Stock Exchange based on market capitalization.
What are the products and services of Barclays under private banking?
Barclays Private Banking offers a range of financial solutions to high net worth individuals in the UK, including:
Wealth Planning
This includes services such as inheritance tax planning, wealth structuring, philanthropy and charitable giving, and trust and estate planning.
Gestione degli investimenti
Barclays Private Banking offers bespoke investment portfolios designed to meet the unique needs of each client, with access to a wide range of investment opportunities and strategies.
Credit and Lending
Provides lending solutions to help clients finance luxury purchases, such as property or vehicles, and to manage their cash flow.
Banking Services
Offers a range of banking services, including current accounts, savings accounts, and foreign currency accounts.
Exclusive Access and Events
Barclays Private Banking clients have access to exclusive events and experiences, as well as a dedicated relationship manager who can help with their banking and financial needs.
Best Private Banks for High Net Worth Individuals: HSBC
HSBC was founded in 1865 in Hong Kong to finance trade between China and Europe. The bank expanded rapidly in Asia in the late 19th and early 20th centuries, establishing branches in Shanghai, Singapore, and other major trading centers in the region.
In the mid-20th century, HSBC continued to expand its operations, establishing a presence in the UK, the US, and other countries. In the 1980s, the bank began to focus on investment banking and expanded its presence in this sector through a series of acquisitions, including the purchase of Midland Bank in the UK in 1992.
Today, HSBC is one of the largest banking and financial services organizations in the world, with a presence in 62 countries and territories.
Its market cap as of the time of update stands at 123.48 billion pounds, according to MarketWatch.
What exchanges is it listed on?
HSBC is listed on the London, Hong Kong, New York, and Bermuda stock exchanges.
What are the products and services of HSBC in the UK for private banking customers?
Gestione degli investimenti
HSBC provides access to a range of investment opportunities across global markets and asset classes, as well as personalized portfolio management services.
Wealth planning
Offers a range of wealth planning services, including estate planning, retirement planning, and tax-efficient investment strategies.
Lending and borrowing
Provides a range of lending and borrowing solutions, including mortgages, personal loans, and credit facilities secured against investments or property.
Family office
HSBC’s Family Office services provide clients with comprehensive support for their family’s financial affairs, including trust and estate planning, philanthropic advisory, and family governance.
Specialist services
The firm has a range of specialist services, including art financing, aviation financing, and yacht financing, to help clients manage their unique assets and investments.
Best Private Banks for High Net Worth Individuals: Lloyds Banking Group
Lloyds Banking Group is a UK-based financial services company that traces its roots back to 1765, when John Taylor and Sampson Lloyd established a private banking business in Birmingham. The company went through several name changes and mergers over the years before becoming Lloyds Banking Group in 2009.
In the 19th century, Lloyds Banking Group expanded rapidly through a series of mergers and acquisitions, which helped to establish Lloyds as a major player in the UK retail banking market.
Since the 2008 financial crisis, Lloyds Banking Group has focused on simplifying its operations and trimming costs. It has also continued to expand its range of financial products and services.
In 2013, Lloyds Banking Group acquired the digital banking platform, Bank of Scotland, which helped to strengthen its online and mobile banking capabilities.
Currently, its market cap is worth 34.85 billion pounds.
Where is it listed?
Lloyds Banking Group is listed on the London Stock Exchange. It is also a constituent of the FTSE 100 Index.
Products and Services of Lloyds for private banking clients in the UK
Lloyds Banking Group provides a range of products and services to high net worth clients in the UK under its private banking division. These services include investment management, wealth planning, and lending solutions.
In addition, Lloyds Bank provides access to its network of specialist advisors, which includes tax specialists, lawyers, and investment managers. This enables clients to receive comprehensive support in managing their wealth. The bank also offers online tools and resources, such as investment research and market insights, to help clients make informed decisions about their finances.
Best Private Banks for High Net Worth Individuals: NatWest
National Westminster Bank, commonly known as NatWest, is a UK-based retail and commercial bank. The bank was founded in 1968 by the merger of National Provincial Bank and Westminster Bank. NatWest quickly established itself as a major player in the UK banking industry and expanded its operations throughout the country.
In 2000, NatWest was acquired by the Royal Bank of Scotland (RBS) in what was one of the largest banking mergers in history. Following the acquisition, NatWest continued to operate as a subsidiary of RBS.
In recent years, NatWest has focused on expanding its digital capabilities and improving customer service. In 2016, the bank launched a digital-only brand called Bó, aimed at offering simple and easy-to-use banking services to a younger demographic.
In addition to its retail banking operations, NatWest also has a commercial banking arm that serves businesses of all sizes, as well as an investment banking division that provides a range of corporate finance and advisory services.
The firm’s market cap is 28.37 billion pounds as of the time of update.
Where is NatWest listed?
NatWest is publicly traded and its shares are listed on the London Stock Exchange. It is included in the FTSE 100 Index too.
What products and services do NatWest private banking provides?
Its services include investment management, wealth planning, and lending and borrowing solutions. The bank also offers a range of specialist services, such as philanthropic advisory and family governance, to help clients manage their wealth and plan for the future.
NatWest Private Banking has a team of experienced relationship managers who work closely with clients to understand their particular needs and establish custom-fit services to hit their financial targets. The bank also offers access to its network of specialist advisors, including tax specialists, lawyers, and investment managers, to provide clients with comprehensive gestione patrimoniale support.
Best Private Banks for High Net Worth Individuals: Royal Bank of Scotland
The Royal Bank of Scotland (RBS) has a long history. It was founded in 1727 by Royal Charter as a private bank in Edinburgh. At first, the bank operated out of a single room with just one cashier and a clerk. However, it quickly grew and began expanding its operations throughout Scotland.
During the 19th century, RBS continued to expand rapidly, opening branches in cities such as Glasgow and Aberdeen. By the mid-1800s, the bank had become one of the largest financial institutions in Scotland.
In 1859, RBS expanded beyond Scotland and opened its first branch in London. This marked the beginning of the bank’s expansion into the rest of the UK and overseas.
In the 1950s, the bank introduced its first credit card, the Access card, which was the first credit card to be issued in the UK. This was a significant milestone for RBS and helped to cement its reputation as an innovative and forward-thinking bank.
The Royal Bank of Scotland has renamed as NatWest Group in 2020. However, it retained the RBS brand.
What are the private banking products and services of RBS?
RBS, now known as NatWest Group, offers a range of products and services to high net worth individuals and families in the UK under its private banking division, NatWest Private.
Some of the key products and services offered by NatWest Private include:
Gestione patrimoniale
NatWest Private offers a comprehensive and custom wealth management service that includes investment management, pianificazione finanziaria, and estate planning.
Credit and Lending
A range of credit and lending services are provided to clients, including mortgages, loans, and overdraft facilities. These services are designed to meet the unique borrowing needs of high net worth individuals and families.
International Services
International banking services are also available. These include foreign currency accounts, international payments, and foreign exchange services. These services are designed to help clients manage their finances across multiple countries and currencies.
Philanthropy and Social Impact
Also offers philanthropic advisory services to help clients achieve their charitable goals. This service includes guidance on setting up charitable foundations, managing charitable trusts, and making charitable donations.
Concierge Services
NatWest Private also affords a dedicated concierge service to its clients, offering a range of lifestyle and luxury services such as travel planning, event management, and personal shopping. These services are designed to help clients manage their busy lifestyles more effectively.
Best Private Banks for High Net Worth Individuals: Final Thoughts
The banks we listed above offer a well-established private banking option in the UK, serving high net worth individuals with a wide range of financial solutions. They also have a global presence which can be advantageous for high net worth individuals with international interests.
Ultimately, the suitability of the banks for high net worth individuals in the UK will depend on their specific needs, preferences, and financial goals. It is recommended to research and compare multiple private banking options before making a decision.
It remains my view that private banks usually offer poor value compared to do-it-yourself (DIY) or services like our own.
Siete afflitti dall'indecisione finanziaria?
Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.
