Wealth Management (WM) or Wealth Management Advisory (WMA) offers services to a broad range of clients from wealthy to high net-worth (HNW) and ultra-high-net-worth (UHNW) families and individuals. This is a solution that combines planning and structuring the planning of wealth to aid in the growth, preservation, and safeguarding of wealth and passing it on to the future generation in a timely manner and in line with their wishes for the future generations. Wealth management typically combines the tax-planning process, wealth protection succession planning the planning for succession as well as the management of families.
Private Banking Explained
Banks and bankers frequently use terms that require further clarification and definition. I attempted to simplify the most crucial terms to provide you with the best assistance.
Principles and Terms of Banking of Finance
Private banks are involved in the field of wealth management and typically are privately-owned generally or in limited partnerships catering to both foreign and domestic customers. They are primarily geared to protect and preserve the interests of their clients.
Privateness can be described as the principal advantage of Private banking. Private banks usually offer HNWIs with specific solutions and are private.
Benefits from Private Banking
Private banking gives customers many benefits as well as privileges and personal service, which is a sought-after item in digitally-driven, automated banking. But there are benefits for private bank customers and the banks themselves.
The big banks generally provide all kinds of transactions that they can, including investment banking (capital markets, trading in securities financial engineering and securities underwriting, and also consulting on deals and mergers).
Investment banking is the department of a financial institution that provides services to corporations, governments as well as institutions, by offering capital raising as well as mergers and acquisitions (M&A) advice services. Investment banks are intermediaries for investors (who have funds to put into investments) and companies (who require capital to expand and run their businesses). IPOshelping businesses to become public, and leveraged finance involves loaning funds to businesses to buy assets and pay for transactions.
The corporate bank also known by the name of commercial banking generally caters to clients of all kinds that range from small- to mid-sized international and local businesses that have less than a million dollars in annual revenue to huge conglomerates with billions of dollars in revenue and offices around the world.
Commercial banks typically provide the following services and products to financial institutions, including corporations: institutions:
- Credit products and loans (secured or unsecured)
- Treasury Services for managing cash
- Equipment lending
- Commercial real estate
- Trade finance
Contat Michael A. Welti
Swiss Wealth Management in UAE
Retail banking provides financial services to the general public, usually with the domestic area of focus. Also known by the name of the consumer or individual banking This part of the banking sector enables customers to manage their finances through access to basic banking services, credit, and financial guidance.
The retail banking industry offers an array of products and services that include:
- Savings and checking accounts
- Automobile financing
- Credit cards and Debit cards
- Lines of Credit (unsecured consumer loans)
- Foreign currency remittance services
- Basic Investment Services
External Asset Managers of External Assets
The term “external asset manager” refers to an External Asset Manager (EAM) a wealth management company that is independent of banks. Wealth managers can be either individuals or businesses.
The terms independent and external asset manager are usually employed in conjunction, but there are exceptions to the rule that every external asset manager is independent in the true sense.
The range of services provided is extensive and differs between providers based on their expertise. Tax consultation and trading, cash management, estate planning, and inheritance management are some of the services provided by EAMs.
The Family Office can be designed as a Single Family Office or as a Multi-Family Office and usually serves a group that is wealthy members of the family who have an interest in investments as well as succession planning and generational wealth.
A Family Office is a commercially operated company that employs personnel who provide support to many wealthy families in the management managing and maintaining some or all their assets, requirements, and wants. It can include everything from banking to Real Estate Management, Concierge services, and even education.
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KYC-Know Your Customer
As per the law your financial advisor, as well as the institution you work with must explain the background of a customer and what their personal situation is, and how the wealth was created. This is the reason the term “KYC Know Your Customer” was developed a few years ago.
The primary goal is to explain the path to a career and in that line, explain the process by which a client accumulated the wealth that is displayed by recording their wealth journey to the present.
Sometimes, this is thought of as an exercise that is intense, however, it actually benefits all those who are involved and is mostly to protect the person who is being protected.
SoW – the source of wealth
This usually is a longer part of the conversation you have between you and your banker. According to the regulations, the bank must document the way your money was earned and how it was accumulated. This shouldn’t be too complicated. The bank has to determine the route of your wealth creation in order to understand your present financial situation. These could be documents like contracts of selling real estate to balance sheets or tax statements and split payouts for your business, based on the manner in which your business evolved.
Clients can use different types of mandates to meet their needs.
DPM – Discretionary Portfolio Management Mandate
The discretionary Portfolio Management service lets you delegate the administration and implementation of your investment decisions to your Bank as well as the Asset Manager with their dedicated teams of experts with knowledge and experience in managing your investments in line with an established investment strategy, typically that ranges from “conservative” and “growth” profile.
Disresponsible Portfolio Management is ideal for investors who want to have their money professionally managed, but do not have the time or energy to be involved with the day-to-day management processes. Instead, the clients will select a portfolio that is most suitable for them with regard to their experience in investing the risk-aversion, the investment goals, and return targets The company will handle the decision-making process and provide reports of the results to clients.
IA — Investment Advisory Mandate
The purpose of Investment advisory is primarily for customers who wish for themselves to act in the decision-making process, in conjunction with experts from the Bank or Asset Management professionals, in close cooperation and supervision by experts.
With clear objectives and clear guidelines and a bespoke, tailored method, providing a customized risk and return evaluation and independent analysis, personalized investment guidance, and swift execution across all types of assets.
The final investment decisions rest with the investors according to the recommendations of our Investment Advisory teams.
For clients who want to make all decisions on their own, without the involvement of the expert team of the respective Banks and Asset Management Companies usually chose the type of profile ” Execution only” which demanded that the investor do himself and his individual research, and develop strategy. Most often, clients choose this option because they are well-connected to the financial markets and have plenty of time to keep track of global economic news and developments.
The primary responsibility of the bank is to ensure the correct execution of instructions from clients, usually limited by regulations that there is no advice or recommendation that could be made to the client, and the responsibility for managing risk and asset allocation lies with the investor/client.