If you earn more than R50 000 a month and are fed up with queuing for cheque books, or if you run your own business and need a banker who understands your business, or if you simply think you’ve arrived at a position in life where you want some personal service, chances are you’re in need of private banking.
RMB Private Bank is worth checking out, for though every retail bank today has a private banking operation, RMB Private Bank has carved a niche especially among entrepreneurs, who make up 70% of its client base.
The bank believes it understands entrepreneurs – that they would rather pay a premium for banking and have someone hand deliver their cheque book or credit card because they can’t afford to be out of the office.
Some private banks look at your net worth when admitting you, but RMB Private Bank CEO Sean Farrell says it recognises that South Africa is a young, fast-growing entrepreneurial country and the fitting eligibility criteria has to be income.
“Our clients are mostly still accumulating wealth, and for that reason we cannot impose a hard and fast entry level. We look for annual income of R750 000, but many people who show the potential to earn that soon – young graduates and professionals – will still qualify. These are people pressed for time,” says Farrell.
Comprehensive range of services
The range of services varies from transactional banking (vanilla cheque and credit card transactions) to structured lending and asset management when clients have accumulated assets that can be invested.
Farrell describes the core strength of RMB Private Bank as its people, and while he agrees all private banks say the same, in the case of RMB it is demonstrable by the fact that its business profits have been growing at an average 35% a year for the past four years (last year 39%), while industry figures show the industry has been growing at a slower 20% a year. It’s also grown assets under management fourfold from R6 billion to R23 billion over the same period.
While you can expect to pay more for private banking, it’s value for money Farrell says. The cost cannot be quantified as the model of private banking is that each client gets a costing based on his personal risk profile. However, because clients are typically low-risk, the bank can give away some margin on loans, typically 2% below prime, sometimes even lower.
Support when you need it
“Private banking is premised upon having close personal relationships and specialists on hand, so you won’t necessarily save anything with a private bank,” says Farrell. “Our clients are prepared to pay that premium, because we really understand their affairs better.”
The benefit of having an appropriate solution can be incalculable, especially to an entrepreneur who lacks the corporate back-up.
“Our value to entrepreneurs particularly comes into its own when structuring their affairs or doing estate planning. There is a huge requirement with entrepreneurs to look at business continuity, key man cover, how to structure their shareholding for tax efficiency, how to introduce a BEE partner or how to exit their business one day.
“Our business is about giving good advice rather than saving rands and cents,” says Farrell.
This almost investment banking approach differentiates RMB Private Bank from other private banks connected to retail banks, while its structured lending and transactional capability differentiates it from those private banks not part of a retail banking group.
For more information, call +27 11 282 8000 or visit www.rmb.co.za