Private Banking

  • Offered to wealthy customers who seek confidentiality and personalised service. Often operates semi-autonomously to other parts of the bank, and is highly lucrative. Key factors in private banking:

    • High profitability

    • Competition

    • Powerful clientele

    • Confidentiality and secrecy between client and banker

    • Trust between client and banker

    • Commission-based compensation

    • Relationship managers that can become client advocates in order to protect their clients

  • Often assets move overseas to corporations in secrecy havens. PICs (Private Investment Companies) are established by individuals to hold assets. They maintain confidentiality and are used for tax or trust related reasons. The secrecy laws of the offshore havens where PICs are located conceals the true identity of the beneficial owner. Sometimes PICs are created with nominee owners (who hold the title to the company for the benefit of unnamed owners) this can sometimes be protected by attorney-client privilege to prevent information about the beneficial owner from being obtained. Many private banks establish PICs for clients, often using a trust company in an offshore secrecy haven.

  • PEPs (Politically Exposed Persons) are a further risk in Private Banking, as they may have access to the proceeds of bribes, extortion, and embezzlement.

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