Private banking has gained a reputation as being reserved for the elite, the equivalent of a private members club with a strict entry policy.
Perhaps this was once the case when private banking was reserved for the Lords and Ladies of our country and the Royal Family.
Today’s world of private banking looks a lot different – or at least it does at Investec Private Banking.
There are currently 134 billionaires based in Britain, according to the 2017 Sunday Times Rich List, compared to just 21 fifteen years ago. Their wealth has been derived not just from ‘old money’ but everything from finance, property, manufacturing and the world of entertainment and sports.
You might not get a billionaire walking through the door of your brokerage anytime soon but with an estimated 700,000 plus millionaires in the UK, it is likely you will bump into the latter, especially given this type of client is not likely to conduct their mortgage business online or through a search engine.
Making it personal
When it comes to their mortgage needs, unsurprisingly, high-net worth clients are not your typical borrower looking for your average fixed rate. In fact, you may be wondering why such a client would require a mortgage at all.
High net worth clients tend to be asset-rich and whilst they are not exactly cash-poor, their available funds may be tied up in property or shares, which they don’t wish to disturb, hence the need for a mortgage.
Each bank is different but if a borrower is applying for a mortgage with us, we ask for a minimum annual income of £300,000 and typical net worth of approximately £3m or more.
Due to the nature of their work, such clients often have complex circumstances. Their salary may partially be paid in foreign currency, or derived from several different sources, often with bonuses to take into account.
They are often specific in their needs and due to their substantial wealth and assets, private banks are often willing to go that little step further and tailor a bespoke mortgage around their circumstances.
In the past, most private banks have founded their lending on what clients are going to bring to them from an asset perspective. So, they would look after a borrower’s wealth management and lend to them on the back of that. We are of the new age where we start the other way around. First proving our worth by lending to clients, then if they wish to move their assets to us they can; or not. At Investec Private Banking we are all about personal banking: moulding our services to match the uniqueness of each client.