Super rich? Banks are lining up to provide you bespoke services
About 10 years ago, when well-to-do Shanghai resident Gao Junqing first heard the term “private banking services,” he wasn’t sure what it meant.
“Even the client-relationship manager at my commercial bank had little idea about it when I asked her,” Gao recalled.
Private banking is an umbrella term for an array of customized services offered to wealthy people. There is no precise figure for just how rich you have to be to join this exclusive coterie, but Investopedia.com puts the minimum at US$1 million in liquid financial assets.
The asset threshold for becoming a private client of a commercial bank here has been set at 6 million yuan (US$922,069) by the China Banking Regulatory Commission.
Unlike ordinary customers, affluent clients are assigned their own account managers to give them personalized attention. The services they provide include investment management, financial advice on protecting and increasing wealth, and information on how to structure legacies for heirs.
Gao, 40, was among the first group of clients to tap private banking back in its early days. He made his money working in information technology for a multinational company and invested it wisely.
He told Shanghai Daily that he remembers his first client-relationship manager.
“She had some traditional Chinese traditional medicine with her and explained that it was for the next client she was scheduled to see,” he said. “I was awed by such considerate service.”
The idea of private banking for the moneyed class is not really new. More than 200 years ago, Lombard Odier, the world’s first private bank, was founded in Switzerland. Over time, as more people in the world became rich, the concept of elite banking took hold.
With private wealth on the rise in China, banking catering to the well-heeled was inevitable.
That segment of financial services has “huge potential” for growth, according to the 2017 annual report released by China Merchants Bank and Bain & Co. Total investible assets of the super rich nationwide will rise by 14 percent in 2017 to 188 trillion yuan.
In the past decade, that segment surged fivefold to 165 trillion yuan in 2016, with 1.6 million people classified as super rich, the report said.
This means that about 400 “new faces” joined the high-net-work club every day during the period, the report said.