How to Become a Private Banker

There’s nothing that screams wealth, sophistication, and exclusivity than the world of private banking. That’s kind of strange because there are far more smoke and mirrors than most outsiders actually realize. Yes, it’s a higher level of service than your average Joe can ever expect to receive at their local branch network. But, fundamentally, private banking does the same job.

It sets out to provide products and services that meet the needs of a certain type of client – in this case, high net worth (HNW) and ultra-high net worth (UHMW) clients.

You could be talking about the Swiss powerhouse UBS and Credit Suisse, the more aggressive US names JP Morgan and Goldman Sachs, or regional Asian providers like DBS and Bank of Singapore. They are all operating in this competitive marketplace, chasing the fastest-growing region in the world.

Maybe this is an area of interest for you. Maybe you’re thinking about a career pivot.

Well, if you are looking to become a private banker, what do you need to know?

Private banks are the same, but different

It’s worth keeping in mind that private banks operate differently across different geographies and different regulatory jurisdictions. In other words, you need to understand the private banking culture for the place where you want to work. I’ve experienced the industry in the US, the UK, and Asia, and it’s safe to say there’s no one-size-fits-all.

So before you get career coaching on how to become a private banker, know what the norms are for your environment. What kind of clients would you be exposed to? What kind of investment products are they interested in? What level of service is “normal”?

And different private banks and wealth managers have different minimum thresholds for what they would view as suitable for a private banking client. For example, St. James’s Place Wealth Management (SJP) recently launched its Asia Private Client proposition in Hong Kong and Singapore. The offering targets a “private client experience” for Asia’s growing affluent population. The minimum investable net worth required will initially start at $1m.

Although the financial services firm expects this level to increase as client demand continues to grow, this level is light years away from the private banking minimums of banks in Asia. At the low end, they start at $5m – and that is very low end. Macquarie Private Wealth Asia, for example, only established in 2008, was set up to address the needs of a niche market: individuals with over $30m in investable assets.

That all said, it’s all about wealth management. So the rules are the same, just on a different scale.  And knowing the core principles that drive this part of the banking spectrum is fundamental, regardless of where you work.

Connections help

Private banking is a people business (obviously). It’s about building and developing relationships in a way that is beneficial to both parties.

But these aren’t any old connections. Private banking clients are very often successful, powerful, influential and at the forefront of their profession. Some are very in touch with the higher echelons of politics. These aren’t your average punters.

So if you want to get a role in private banking, think about who you know. That might sound a bit fluffy and irrelevant. But I once knew a woman who, having previously built a successful career selling diamonds to the well-heeled, transitioned into a private banking role. She had the network, she knew how to talk to people with big bucks, she carried herself well.

She wasn’t actually that great as a banker, as she lacked a lot of the technical knowledge required. But intrinsically she offered something to the bank. She knew the right people. She had a direct line to Asian tycoons.

And this is a fast-changing world where it’s getting harder to find quality bankers while getting access to the right people with money matters. With wealth growing so fast in Asia, private banks often have to think differently and aggressively. That’s why the diamond lady had value.

Maybe that also means getting a banker with a decent portfolio serving lower-tier premium or priority clients, hoping that their strong networking ability will enable them to build up a sizeable portfolio over time. If you currently operate in that space, see whether you can position yourself for the next step up.

Equally, if you have a specialist background within industry or society, you could still fit the needs of a private bank. Certain banks, like Coutts in the UK, segment their client base based on their background. For example, the bank has a Sports, Media & Entertainment segment, servicing clients from that space. So if you have a background providing services for those kinds of individuals, a private banking role may be for you.

Getting a role from the ground up

The time-honored approach has been for future bankers to rise into position through the banks’ Management Associate Program or as Assistants to Private Bankers for many years. At that point, they will inherit a small portfolio to be a junior Private Banker. And then they have to grow it.

This path (or a version of it) still exists. It may look different in different parts of the world, but fundamentally it’s about getting the talent early and letting them grow into the role. Obviously, that growth partly comes through client acquisition. And that means building networks to grow relationships.

Convert from investment banking

Transitioning from the world of investment banking to private banking is an increasingly common trend. After all, there’s an obvious appeal if you can get a role in a fast-growing part of financial services, while not having to put in the 100+ hours a week you may have done previously, while still earning reasonable remuneration. If your investment banking role is on the ropes then this is an option.

At the same time, they are different beasts. While private bankers may excel at relationships and personal advice, an investment banker’s strength is more commonly focused on business financial management and negotiation skills. Investment bankers bring significant amounts of expertise and prestige to service sophisticated clients.

There are obviously areas of overlap, but these are still two culturally different parts of banking. Not all investment bankers are suited to the need to constantly sell products and hunt for new clients and assets under management. Not all can adapt to the politics. I’ve seen investment bankers arrive with rock star credentials, only to fall by the wayside when they struggle to adapt to the needs of a very different clientele.

Technical skills help

Building a network and client base is important. But technical expertise is vital to service the high net worth needs. You have to be more than a hunter of new clients, and you have to be more than just a good relationship point.

Gone are the days when a client would just need a savings account and a mortgage from their private banker. The world has become more complicated. Clients have become more sophisticated. Products have become more complex. In a low-interest-rate world, banks have had to become smarter.

Not all private bankers are deeply knowledgeable about investments. And there will be people within the business to help.  Different banks will have different levels of specialist support to support the bankers – investment specialists that are experts in equities, fixed income, and foreign exchange, for example.

But there will still need to be a certain level of knowledge required for engagement with clients. So if you’re looking to get into private banking, build up your skills, brush up on your stock market knowledge, sharpen your understanding of structured products, and learn the mechanics behind private equity, among other things. Be intentional.