You probably think you know what banking involves. Maybe you’ve recently refixed your home loan through your online banking or dialled the 0800 number to ask a question.<\/p>\n
But a select few New Zealanders have access to much more, through the banks’ private banks.<\/p>\n
These select services cater to people with high incomes or large amounts of money to invest and give clients direct access to individual private bankers who manage their banking needs.<\/p>\n
There are no hard rules, but generally banks require people to have investable assets of about $1.5 million to be admitted as private bank clients, or annual income of around $400,000.<\/p>\n
ANZ private bank general manager Glenn Stevenson said it has been in existence since the 1990s.<\/p>\n
“The way I would describe it is that it’s aimed at high net worth customers who are essentially needing support to grow and manage their money over time.”<\/p>\n
He said ANZ included banking, investing and lending within its private bank.<\/p>\n
“Those three elements work in unison through the one business. We’ll have people, private bankers as we call them, that specialise in each of those.”<\/p>\n
He said the income and asset thresholds were designed to reflect the complexity that could go into those individuals’ banking situations.<\/p>\n
“On the lending side of our business you’ll find a lot of those clients tend to be things like c-suite or clients who are medical professionals, who are really busy in their day jobs and have a lot going on but because of the incomes they earn they tend to pay down that debt quite quickly\u2026 it’s things like investment properties through to renovations and things they are doing on their own homes or holiday homes.<\/p>\n
“Then they can build it into more investment, growing their wealth in other ways. We can support them on both sides of that equation.”<\/p>\n
He said private bank clients would have a dedicated private banker supporting them and their family. If that person was not available, someone else would be able to step in who understood their situation.<\/p>\n
They could also ask for help with more mundane banking needs.<\/p>\n
“It might be ‘oh look I’m receiving some money overseas or I need to move some money offshore’ or whatever that is, they can ring this line and we’ll support them with those things.”<\/p>\n
He said the bank might also help with information and education opportunities.<\/p>\n
“We might every now and then bring in dedicated professionals\u2026 lawyers talking about family trust or trust structures, there might be changes in legislation we think would be worthwhile for a bunch of our clients to understand more.”<\/p>\n
Stevenson said the way banking was priced for those clients would be appropriate to the amount of business they were doing with the bank.<\/p>\n
He said the private bank business was growing as people built wealth through things like KiwiSaver and platforms such as Sharesies that encouraged investment.<\/p>\n
“The other side of it, which again is an industry thing both globally and clearly here in New Zealand is there is a building wealth transference that is starting to happen as baby boomers and the generation above them are moving on and beneficiaries of that wealth are clearly looking for some support and what they do with it, and so that’s a really important part of our business as well.”<\/p>\n
At BNZ, a spokesperson said the private bank did not have a single qualifying threshold.<\/p>\n
“We have specialist teams supporting different client needs, including wealth advisory, private banking and family office services. Our wealth advisory team generally supports clients with significant investable assets, while our private bankers also work with high-income clients who are still building their wealth.”<\/p>\n
Massey University banking expert Claire Matthews said the main benefit to clients was that it was a personalised service, with someone to call if there were problems.<\/p>\n
Squirrel chief executive David Cunningham said when he was in banking, private banking was dominated by the amount of home lending clients had.<\/p>\n
“They were trying to add more of a wealth dimension, but the bankers tended to have a lending focus so I suspect that has remained largely the same.”<\/p>\n
He said it was a significant part of the banking business but only involved a small proportion of customers.<\/p>\n
Stevenson said, at ANZ, home lending was not a primary driver of private bank services.<\/p>\n