Future of private banking

I was recently with a group of ultra high net worth clients of a major bank, and spoke to them about their future after having had dinner with them the night before.

A question raised as a result of similar conversations with a number of them:

 

What is the wealth for?  Private banking exists to preserve wealth and is successful.  Many clients become wealthier each year – and cannot possibly in their lifetime find enough ways to burn through that wealth faster than it is created.  Much of what they spend is actually saved – for example buying another property or a work of art, both of which appreciate in value.

 

They are often concerned that wealth will wreck their children – so these assets are not being developed for them.  The same applies to the grandchildren.

 

So if the wealth is not for the parents, nor their children, nor their grandchildren – what purpose does it actually have?

 

The answer for many is to make a difference.

 

That is why the vast majority of ultra-wealthy have charitable foundations of their own.

 

Private bankers need to understand this:  their role in future should also cover philanthropic advice – or at least they should be able to offer it as part of the relationship.  This area is a deeply personal one and presents many questions.  If a client wishes to give to a cause, how do they find one that is reliable, cost-effective and so on. 

 

Watch out for many new organisations that are springing up to help fill this need.