Private banking VS IFA

MarcoM

Hi,

I was wondering if private banking provides value for money for those who are able to use this facility should they wish to do so.

I can imagine that using a private banking arm of HSBC or LLoyds means you'll probably get your own seating area and cup of coffee when you visit their offices but are they likely to sell products that are only linked to their portfolios ie. same scenario as visiting a high street bank FA?

Is the IFA a better option coupled with using the "normal" banking arm of a high street bank for cash accounts?

Thanks

Lokolo

You'll only get to one of those if you have a LOT of money...

dunstonh

I can imagine that using a private banking arm of HSBC or LLoyds means you'll probably get your own seating area and cup of coffee when you visit their offices but are they likely to sell products that are only linked to their portfolios ie. same scenario as visiting a high street bank FA?

You dont get even that. You get the same cheque book, card and the staff at the branch wont even know you are using LPB.

As an IFA, I love coming across bank private banking clients. All the recent LPB portfolios have been far too heavy in Scot Wid funds and the double layers of charging make it easy for an IFA to show better value. The staff turnover is something people always seem to complain about with bank discretionary management as well.

Is the IFA a better option coupled with using the "normal" banking arm of a high street bank for cash accounts?

Your options should either be an IFA or a discretionary investment service. The bank should be eliminated full stop. Personally, I am not a fan of discretionary investment management. You may think an IFA would say that but IFAs can use discretionary firms and still be paid. So, its not a remuneration issue. I just find that for most people, they do not need the sort of investment methods that discretionary investment gives. Millions of pounds then you are in consideration for it but less than that and the cost will often outweigh the benefit.

MarcoM

Dunstonh thanks for the comprehensive reply.

One last question, do IFAs have property deal on offer? I mean for example equity investments in residential or commercial developments.

dunstonh

One last question, do IFAs have property deal on offer? I mean for example equity investments in residential or commercial developments.

Not with their IFA hat on. They may do if they have other hats on. I would be concerned if they did as it would interfere with being independent. Ethically, the adviser should have no personal or linked schemes available even if they are non-regulated ones. Rules allow it but I personally would avoid it if you did manage to find one. The closest an IFA should get to property should really be REITs. bricks and mortar funds or property share funds or at most an unlinked scheme where they have no involvement at all (but you are going outside of remit there)

gadgetmind

MarcoM wrote: »

I was wondering if private banking provides value for money for those who are able to use this facility should they wish to do so.

No.

Banks are for current accounts, cash point cards, cheque books, direct debits and standing orders. They are not for investments, advice, wills, bonds, or anything else of that ilk.

My bank "upgraded" me to what they call private banking as part of trying to wean me off an old account type that they had good reasons for withdrawing and I had good reasons for continuing with. They then kept inviting me for a savings and investment review, which I kept declining. I finally told them I was far too busy, but did had an 8am slot at my office on the third Wednesday of next month.

The sods only went and turned up!

gadgetmind

MarcoM wrote: »

One last question, do IFAs have property deal on offer? I mean for example equity investments in residential or commercial developments.

If you're serious, I do know an IFA who specialises in using SIPPs to fund loans to commercial property developments (and residential to shell), which are secured on land/property/etc.

Returns are LIBOR linked (but capped) and are currently running at about 8%.

I decided that I was happier with most of my money in equities/bonds, and the fees meant using a slice for this didn't make much sense, but those who are equity-averse might fancy a pop.