When selecting a bank to manage your hard-earned money, you want to understand all your options. Although there are many bank types that may work for you, slight differences can affect your financial future. Two options, a private bank and a multifamily office, have a lot in common, but there are some key differences you may want to consider. At Pasquesi Sheppard, we want you to make sound financial decisions. Read on to learn more about the differences between a private bank and a multifamily office and what this means for your finances.
A private bank is a high-end, often individualized banking institution that provides personalized financial services for wealthy clients. Besides traditional banking, these institutions may also offer investment and other services within one office. Since wealthy clients may have complex financial needs, a private banker can help them manage extensive investment portfolios, trusts, multiple business accounts, and complex loans. This comprehensive service can enable a client to take care of all their financial needs under one roof, saving time and resources and allowing the client to focus on other aspects of their professional and personal lives.
Although very similar to a private bank, a multifamily office is a little different. These firms offer comprehensive financial options to help manage the wealth of a small number of wealthy families. Services can include everything from money management to estate planning and family education. There may also be a special focus on inheritance and succession planning within these organizations, as they need support in passing down and managing large amounts of money.
Much like a multifamily office, a single-family office offers similar services to one individual or family. The benefit of combining multiple families within one office is that it can allow for cost-sharing among families. Your personal decision can depend on your wealth level and desired financial goals.
If you’re a high-wealth individual, these banking options may seem overwhelming. But there are some key differences that you can consider to make your choice clearer.
Clients for each banking type may be extremely wealthy and influential. However, multifamily banking tends to be associated with even more significant wealth. This is because wealth owned by many generations can lead to significant and complicated financial needs.
These services can come at a price, though. The required labor and upkeep to maintain a financial institution for a few families can be extensive. If you want to make the investment, though, you may greatly benefit from the personalized service options for you and your family that a multifamily office provides.
If you’d like to join a banking institution that helps you plan for the ways that your family’s wealth can remain intact over generations, you may find the services at a multifamily office helpful. These institutions can help you create and manage complicated succession plans that distribute your wealth in whatever way you see fit. It can give you peace of mind knowing that you have a solid plan in place for your family’s financial future.
The expectation of any inheritance services is that your family members can continue managing their wealth through the same institution throughout their lives and their children’s lives. In the future, your kids may even work with the same office to help create inheritance plans for their families.
If you’re not looking to work on inheritance, though, or you feel like you won’t require any additional attention in this area, a private bank may be more in line with your needs.
Besides inheritance, multifamily offices may have the resources to help you manage complicated financial needs. If you’d like to focus on philanthropy, for example, a multifamily office can help you establish charitable relationships with your favorite organizations. You can even work on developing education plans to help your family succeed in the future.
In a private banking situation, you will also receive highly personalized attention and financial services. The difference is that, because private banking services often come through specialized divisions of regular banks, you may frequently be offered the bank’s in-house financial options. For some people, this may feel like the bank is selling or pushing its services, but others may enjoy the convenience and flexibility of having banking options offered from one provider right in the same building.
Worried about confidentiality within your financial services? You may want to prioritize the individual attention of a private bank. While a multifamily office may have the extensive resources and staffing to ensure that your most important data is safe, you may not be comfortable working with other families. This personal decision can depend on your preferences and if there are other families with similar levels of wealth that you trust.
Both private and multifamily banks work hard to develop relationships with their clients. With a multifamily office, though, you can expect to work with the same people and the same policies over generations. If you’d like your grandchildren to have designated banking professionals before they’re out of diapers, you may feel comfortable in a multifamily setting. If you’d rather not share your banking professional with anyone else, private banking may be the way to go.
There are several factors that go into any banking decision. While we listed just some differences between the multifamily and private bank options, the final decision will come down to your personal preferences and what your service needs are. Have questions about each banking type and which one might work for you? Want to see if you qualify for specialized banking? Feel free to contact us today.
At Pasquesi Sheppard, we want to help you make financial decisions that get you closer to your goals no matter if your goal is to build a financial name for yourself or pass one down to your family. The first step to financial success is often to determine what you want and find a partner who can help you achieve it. Our accounting and consulting services will address your specific needs as you search for your ideal banking option. Reach out today and let us help you begin your financial future today.