Private Bank Accounts

As an alternative to low-cost electronic brokerage platforms Interactive Brokers and Saxo, GFM also manages an increasing number of private bank accounts on what is often called an “external asset manager” basis. Unlike the electronic brokerage platforms, private banks traditionally already include “white glove” service through a personal relationship manager to clients that meet their minimums (often multiples of US$1 million), and so the main reason to employ an external asset manager is to “keep the bank honest”, and provide independent checks on investment views and competitive costs on products and services.

By far the #1 advantage of having your account at a bank rather than on a brokerage platform is that a bank account can more easily serve as your primary “hub” for transferring funds in and out between different members of your family and estate. For example, many brokerage platforms will only accept fund transfers to or from a bank account in the exact same name as a brokerage account, and so if you set up a family trust, investment company, or foundation, you will need to set up a separate bank account in the name of that entity just to transfer funds in and out of your brokerage account. A managed bank account, in which you can make your investments, saves this extra step and level of complexity.

Private banks also tend to provide access to more exchanges and bond markets, and also try and be competitive on financing rates if you want to borrow money against your investments, but again, this is where an external asset manager can help make sure you are not paying too much. Here in Asia, the publication Asian Private Banker is one source of news on this space.