How to Become a Private Banker

The private banker is the main interface between the private bank and the clients. The general function of a private banker is to manage the portfolio of clients and acquire new clients using referrals from within their network. They advise clients on investments and generate revenue based on management, execution and performance fees.

As the main money makers for the bank, private bankers will have targets in place:

Requirements for Private Bankers

Candidates will need exceptional interpersonal and communication skills. They will need to be comfortable working under pressure and in a target-driven environment. Prior experience in private banking is usually necessary. An existing portfolio of wealthy clients and a track record of strong revenues and asset acquisition are highly desired. Not all private bankers have a background in the industry however.

Candidates that have strong relationships with High Net Worth and Ultra-High Net Worth individuals don’t necessarily work in private banks and hires have been made from all of the following:

  • Corporate and Investment Banking
  • Real Estate
  • Private Equity
  • Commodity Trading
  • Boutique wealth management firms
  • Corporate Finance and Advisory

Titles in the Industry

A private banker may also be referred to as a ‘Relationship Manager.’ Some banks have their own titles. For example, Private Bankers at EFG are called Client Relationship Officers or CROs. Private Bankers at UBS Wealth Management are usually referred to a Client Advisors.

In addition, they may hold typical corporate banking titles, such as Associate Director, Director, Executive Director and Managing Director.

Net New Money (NNM) and Net New Assets (NNA)

This refers to the amount of fresh assets that the private banker brings in to the bank, either from new or existing clients. A typical first year target can be anywhere from $30m to $100m, depending on the institution.

Returns on Assets (ROA) – Private bankers are judged primarily on their ability to generate revenue, as ultimately this is the key to the profitability of the bank. This is highly dependent on the type of clients and their risk profile. For example, some clients might frequently trade equity options, which would command a higher fee than a mutual fund. It also depends on the offerings of the bank and the geographical market they occupy.

Returns are measured in ‘basis points,’ or bps. One basis point is equivalent to one hundredth of one percent. Typical ROAs range between 0.5% and 1.5% of the total assets under management (50-150bps).

New to Bank Clients (NTB)

The private banker might be expected to acquire a certain amount of New To Bank clients per year. This means clients who do not have any existing account with the bank.

Hunter and Farmer – Two examples of private banker are the Hunter and the Farmer. The role of the Hunter is to acquire new clients and assets for the bank. There is a heavy emphasis on new business development and networking. Hunters usually begin at a bank with the target of building their own portfolio from scratch.

The Farmer focuses on client development, management and retention. They are usually given a portfolio when they join the bank, with the target of increasing revenues from existing clients who may be inactive. They may also be required to retain certain clients who are thinking of leaving the bank.

The two can overlap and some Private Bankers inherit client accounts but are still mandated to increase the size of the portfolio.


Read More:

Private Bank Careers


    Upload Your CV