THE wealth management industry doesn’t seem like a natural fit for an entrepreneur. After years of building a business from scratch, why would you leave your hard-earned cash with a manager?
But the industry is starting to directly target entrepreneurs and is actually tailoring packages solely for their needs.
For example, Vestra Wealth set up an “entrepreneurs club” last year. It offers all the usual services of a wealth manager: tax planning, asset allocation and advice, but on top of that it assists entrepreneurs with the selling of their business, offers a wider variety of investment opportunities– such as angel investing – and runs a forum so that groups of entrepreneurs can get together in a social atmosphere and discuss opportunities and meet like-minded people.
Vestra Wealth’s William Townrow says that entrepreneurs have been keen to help out new start-ups during the recession: “Although in this environment everyone wants to remain fairly liquid, entrepreneurs are more open to investment opportunities, and they are actually funding a lot of start-ups as banks retreat from lending.”
Dean Proctor, chief executive of Arbuthnot Latham, says that private banking is not just about asset management, it can also help with the less lofty elements of banking. Most offer current accounts with the personal touch, which means you no longer need to hang on the line to an annoying call centre with a problem.
But how much money do you actually need for a private bank account? At Arbuthnot Latham the ideal starting point is £250,000-£500,000 in investible assets. At Vestra Wealth, the starting point is usually £500,000, although they will assist entrepreneurs who have fewer assets.
And the industry has taken steps to make their fee structure more transparent. Arbuthnot Latham posts all of its fees online, for example a banker’s draft costs £25 and overseas cash withdrawals are subject to a 2 per cent charge. And Vestra Wealth will charge 1 per cent of clients’ assets under management. After much criticism of the industry, hidden costs are now a thing of the past.
Private banking might sound like an extravagance that entrepreneurs can do without, but it’s worth considering your options.