If your wallet included an American Express Centurion Card, it used to be a symbol that perhaps you had “made it”.
The famous Amex Black Card has been said to be available by invitation-only to those with an annual income of at least £1m.
Paying for a premium bank account will also buy you an elite level of customer service.
“More often than not, someone with wealth first looks for an ‘exclusive’ bank when they have just been waiting on the end of the phone for two hours,” said Matthew Cole from The Private Office, a financial adviser.
“When you have a lot of wealth, you want to be able to fast track to the front of the queue.”
With exclusive private banks, that’s just what today’s high-net worth individuals get.
Coutts – the King’s bank, but other clients are thought to include the rapper Stormzy and actress Emma Watson – gives its customers a personal banker and access to its concierge service, which Peter Flavel, who stepped down as chief executive earlier this year, described as a way to get the “typically unreachable”.
Every customer of C Hoare and Co, owned by the Hoare family for 12 generations, has a dedicated relationship manager who also has an assistant, giving them two known points of contact, and Hampden and Co, a younger bank, has private bankers for each customer.
This level of service cannot be afforded to everyone, though.
Just how much money do you need to use a private bank?
As with most industries, it varies. Coutts, the most well-known “exclusive bank” and part of NatWest, falls around the middle; you need £1m of investable assets or you need to borrow £1m in order to bank with it.
C Hoare and Co’s requirements are slightly higher, £3m in deposits and £1m of lending, as is the criteria for SG Kleinwort Hambros (owned by the French company Société Générale), at £2m or more in investable assets.
But you can access private banking with less than millions. To become a client at Hampden and Co, based in London and Edinburgh, for instance, you need £350,000 to deposit or to borrow £500,000.
Outside of finances, some private banks will pick and choose clients based on other factors. For instance, someone from Hoare and Co will interview every single client to make sure they are a “good fit” for the bank.
Why would a high-net worth person use a private bank?
Outside of dedicated private bankers and top-notch service, the typically more complex nature of the finances of the wealthy mean that private banks can be a naturally good fit.
If you are being paid in different currencies – such as someone in the entertainment industry – it can be helpful to have a bank that caters for sterling, dollars and euros, for instance, as well as one that can send money to different jurisdictions.
Those who run their own business can typically access both corporate and personal finance easily at a private bank, as well as it being a one-stop shop for their spouse and children, too.
According to Mike Stimpson from the wealth manager Saltus, another main differentiator is leverage: they can lend you money against your assets.
“For some people, that is very valuable. If you think now is a great time to invest in equities, and you have £5m in your portfolio, then they can lend you another £2m at attractive terms and then you have £7m of exposure,” said Mr Stimpson.
In some cases, this could mean being able to buy a £1m home, despite not having any income.
What other services do private banks offer?
For many high-net worth customers, the non-banking services are equally important – a feature of private banking particularly prevalent at Coutts.
The bank wants its customers to think of its headquarters on the Strand as somewhere they can “drop in”.
Its rooftop garden has a fully working kitchen and is home to three beehives, the honey from which is used by its private chef, Peter Fiori.
Special events have seen its customers rub shoulders with the likes of David Attenborough, the beloved BBC presenter, and Mark Carney, the former governor of the Bank of England.
And there is a whole team dedicated to its concierge service. Mr Flavel said: “If you need tickets, they can probably source them, if you have lost something, we will try pretty hard to find it and if you need specialist advice, they know the best in the business.”
How much does it cost to use a private bank?
Again, this varies from bank to bank and on what services you use.
Coutts charges £900 a year for one customer, taken in quarterly instalments of £225. If you have between £250,000 to £499,999 of assets with the bank this drops to £75 a quarter, and it waives the fee completely for those with £500,000 or more.
Hoare and Co charges £50 a month, as well as costs for manually sending payments or non-standard payments, like Chaps. Hampden and Co has no monthly fee for a UK account, but charges 30p for automated debit and credit transactions and for other services such as cheques and using your account abroad.
Private bank high street options
High earners also have the option to access premium bank accounts from high street banks promising a superior experience to standard current accounts.
HSBC’s Premier account is reserved for those with an annual income of at least £75,000 (paid into your HSBC account) and either a mortgage, investment, life insurance or a protection product with the bank. Alternatively if you have savings or investments of at least £50,000 with HSBC UK you can have a Premier account.
There’s no fee and benefits include worldwide travel insurance from Aviva for those under the age of 70. This also covers dependents up to 18, or 23 if they are in full-time education as well as winter sports.
As a Premier customer you’ll also have access to a choice of two credit cards, both of which give you reward points when you spend and discounted airport lounge access and hotels among benefits.
Barclays Premier account requires a minimum annual salary of £75,000 or £100,000 in savings or investments with the bank. There’s no fee for this account which comes with a range of perks like discounts on travel, dining and experiences such as spa treatments.
You will also get exclusive rates on mortgages and savings accounts and access to the premier team 24/7 by phone.
To open a NatWest Premier account you need to earn £100,000 (or £120,000 joint income) paid into your NatWest account. Alternatively you can have £100,000 savings or investments or a £500,000-plus mortgage with NatWest.
There are three Premier accounts to choose from. Premier Select is free and offers the very basics including fee-free spending on your card overseas and access to the Premier banking team.
Premier Reward costs £2 a month and on top of the Select benefits you can earn cashback of up to £10 a month by using direct debits and logging into the app each month.
The Premier Reward Black costs £31 a month and for your money you’ll get a 24/7 concierge service, airport lounge access, and worldwide travel cover on top of the other benefits.
NatWest is currently offering £200 to switch to any Premier account, using its switching service.
Santander Select is a service you can bolt onto your Santander current account if you pay in monthly income of at least £5,000 or you keep £75,000 in any Santander account (savings, current account, or investment).
This is free and gives you access to a priority phone service, access to a World Elite credit card which comes with airport lounge access and concierge services (for a monthly fee of £15). Select customers also get discounted will writing and lasting power of attorney services.
So, is it worth it?
If you are the right kind of client, a private bank could be a perfect fit, according to Mr Cole.
“Retail banks have grown to thousands if not millions of customers, and they just can’t afford to give you a personalised service,” he said.
“There’s a reason there’s only a small number of first class seats on a flight. Yes, there are going to be some costs, but if you meet the bank’s requirements, it should be a good fit.”
It can also pay to pay more if you have a more complex financial situation. Rory Scott, founder of Comparewealthmanagers.com, says: “If you just want banking services – or the prestige of handing over a private bank card when you pay for something – then the annual charges might be more than you need to pay for what you really need.
“Where private banking comes into its own is when you have complex borrowing needs.
“For example, if you are developing a property and need to raise funds for the development a private bank can leverage against the equity that you have in an existing property, or against your investment portfolio if you have one.”
This article is kept updated with the latest information.
