Private Banking refers to services that banks reserve only for their largest and richest customers. A Private Banking internship offers an individual the opportunity to work with customers who are known as “high-net-worth individuals” (HNWI). As the name suggests, these customers have a lot more money than the average person does. As a result, they can invest their money in a wide variety of ways. For example, a person with an annual income of $30,000 after tax may be able to afford only a few savings and investment schemes. On the other hand, a person with an annual income of $10,000,000 is provided with more savings and investment options. For instance, an HNWI can invest part of their income in mutual funds and another part in real estate.
The key concept in play here is that as a person gets richer, their banking needs change and expand. Private Banking provides services to those people whose wealth levels are above some predetermined threshold. Different banks use different thresholds, ranging from $100,000 to $15,000,000, depending on the types of services offered.
What to Expect from a Private Banking Internship?
Unlike standard commercial banking services, Private Banking services are very personalized and often vastly different from those offered to regular banking customers. In addition to managing a customer’s wealth and providing advice on potential investment opportunities, Private Banks also offer legal counsel, manage inheritance-related issues, and assist in the settlement of disputes.
It should be clear by now that a Private Banking internship, just like a Private Banking career, can involve a wide array of job responsibilities. For example, the type of work given to an intern interested in wealth management will be different from that given to an intern interested in client relationship management. A wealth manager in a private bank might only be responsible for the management of one customer’s investment portfolio, whereas a wealth manager in a standard commercial bank might look after the investment portfolios of several customers.
Based on an intern’s interests, he or she will be assigned to a specific division, such as wealth management or client relations, and also be assigned to a specific customer. For example, an intern with a background/interest in finance may be assigned to the wealth management unit, whereas an intern with a computer science background may be assigned to a specific customer who wishes to invest in cryptocurrencies such as Bitcoin.
The Importance of Confidentiality
One of the key benefits of private banking is the high level of confidentiality and anonymity it provides. Private Banking customers consist of some of the richest and most powerful people in the world. These clients often require strict confidentiality in relation to their banking activities.
Prior to the 2007-2008 financial crisis, Private Banking services were virtually 100% anonymous. After the crisis, private banks came under heavy scrutiny and were compelled to comply with certain government regulations. This was done to improve accountability and help prevent financial crises in the future.
Advantage of a Private Banking Internship or Career
As long-standing customer relationships are critical to a private bank’s success, one important aspect of private banking is ensuring that its employees are satisfied.
For example, consider a wealth manager who has worked with a specific customer for five years. The wealth manager knows all the customer’s dealings and, thus, can provide him with the specific services that he needs. If the wealth manager becomes dissatisfied with his employer, he might be tempted to leave and take the customer with him. It is especially important for Private Banks to keep their employees satisfied – more so than in other industries. In addition, Private Banks often include a non-compete clause in their employee contracts. This is done to prevent exactly the kind of situation described above.
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