Private Banks
Historically, private banking has been viewed as a very exclusive niche that only caters to High-net-worth individuals (HNWIs) with liquidity over $2 million, though it is now possible to open private banking accounts with as little as $250,000 for private investors.[1] An institution's private banking division provides services such as wealth management, savings, inheritance, and tax planning for their clients. A high-level form of private banking (for the especially affluent) is often referred to as wealth management. For private banking services clients pay either based on the number of transactions, the annual portfolio performance or a "flat-fee", usually calculated as a yearly percentage of the total investment amount.[2]
"Private" also alludes to bank secrecy and minimizing taxes through careful allocation of assets, or by hiding assets from the taxing authorities. Swiss and certain offshore bankshave been criticized for such cooperation with individuals practicing tax evasion. Although tax fraud is a criminal offense in Switzerland, tax evasion is only a civil offence, not requiring banks to notify taxing authorities.[3]
Historically, private banking has developed in Europe (see the List of private banks). Some banks in Europe are known for managing assets of some royal families. The assets of the Princely Family of Liechtenstein is managed by LGT Bank (founded in 1920). The assets of the Dutch royal family is managed by MeesPierson (founded in 1720). The assets of the British Royal Family is managed by Coutts (founded in 1692).
In Switzerland, there are many banks providing private banking service.[4] From Congress of Vienna in 1815 Switzerland has remained neutral including the time of two World Wars. After World War I, the former nobles of Austro-Hungarian Empire moved their assets to Switzerland for fear of confiscation by new governments.[5] During World War II, many wealthy people, including Jewish families and institutions, moved their assets into
"Private" also alludes to bank secrecy and minimizing taxes through careful allocation of assets, or by hiding assets from the taxing authorities. Swiss and certain offshore bankshave been criticized for such cooperation with individuals practicing tax evasion. Although tax fraud is a criminal offense in Switzerland, tax evasion is only a civil offence, not requiring banks to notify taxing authorities.[3]
Historically, private banking has developed in Europe (see the List of private banks). Some banks in Europe are known for managing assets of some royal families. The assets of the Princely Family of Liechtenstein is managed by LGT Bank (founded in 1920). The assets of the Dutch royal family is managed by MeesPierson (founded in 1720). The assets of the British Royal Family is managed by Coutts (founded in 1692).
In Switzerland, there are many banks providing private banking service.[4] From Congress of Vienna in 1815 Switzerland has remained neutral including the time of two World Wars. After World War I, the former nobles of Austro-Hungarian Empire moved their assets to Switzerland for fear of confiscation by new governments.[5] During World War II, many wealthy people, including Jewish families and institutions, moved their assets into