Difference between private and conventional banking
Private baking deals with the financial services in addition to investment subjected by banks for individuals’ investing. Private refers to be more personnel form of banking that adds to the customer service in the mass-market. In consequence, it is regarded as dedicated service rendered by the bank advisors. Private banking is also considered as an incorporated banking institution.
This form of banking used to be very much exclusive comprising of only high amount transactions for the individuals normally exceeding $2 million during earlier times. It has been reduced to $250,000 for individual bank accounts to attract the private investors in recent days. The private institution can offers the investors with various deals and planning like wealth management, inheritance, savings and tax planning and Wealth management is considered as the highest profile form of private banking. The word private in this context often submits to bank secrecy that minimizes the taxes with care by hiding the assets from the tax authorities. Fraudulent activities are regarded to be criminal offense whether tax evasion is the only activity that has been declared as civil offense in Switzerland.
For 2006, Scorpio Partnership’s Annual Private Banking Benchmark has nominated UBS AG as the largest private banking division of all time and Citigroup and Merrill Lynch are the next two that can congregate more than $1 million assets under the label of wealth management for private clients. On 30 June, 2008, five largest banks of US i.e. Merrill Lynch, Citi Global Wealth Management, Bank of America Global Wealth, Wachovia and Morgan Stanley Global Wealth Management were honored to have amassed $1.05 trillion, $843 billion, $653.2 billion, $551 billion and $423 billion of assets respectively.