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Private Banking Internship

Guide to securing an internship in private banking services

About Private Banking

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 own a lot more money than the average person. As a result, they can use their money in many ways. For example, a person with an annual income of $30,000 after tax may be able to afford only a few saving and investment schemes. On the other hand, a person with an annual income of $10,000,000 is provided with more saving and investment options. For instance, a HNWI can invest part of their income in mutual funds and another part of real estate.

The key concept in play here is that as a person gets richer, his banking needs change. Private Banking provides services to those people whose wealth levels are above some predetermined threshold. Different private banks use different thresholds and these can range from $100,000 to $15,000,000, depending on the types of services offered.

 

Private Banking Internship

 

What to expect from a private banking internship?

Unlike standard commercial banking services, Private Banking services are very personalized and often, services provided by the same bank to Customer A are vastly different from those offered to Customer B. For instance, in addition to managing a customer’s wealth and providing advice on potential investment opportunities, Private Banks also offer legal counsel to its customers, manage inheritance-related issues and assist them in the settlement of disputes.

It should be clear by now that a Private Banking internship, just like a Private Banking career, does not consist of some clearly defined 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. Unlike standard commercial banks, the services being provided are personalized. For example, a wealth manager in a private bank might be only responsible for the management of only 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 (i.e. numbered bank accounts). 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 prevent any financial disaster 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 other important part is ensuring that its employees are also satisfied.

For example, consider a wealth manager who has worked for a specific customer for 5 years. The wealth manager knows all the customer’s dealings and thus, can provide him with the specific service that he needs. If the wealth manager becomes dissatisfied, 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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