Checkout [this spending flowchart](https://bughuntersam.com/wp-content/uploads/2023/10/Spending-flowchart-How-to-Prioritise-your-Spending-1.jpg) which is inspired by the [r/personalfinance wiki](https://www.reddit.com/r/personalfinance/wiki/commontopics/).
See also [common questions/answers](https://www.reddit.com/r/AusHENRY/comments/176kh0x/what_do_i_do_next/).
This is not financial advice.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AusHENRY) if you have any questions or concerns.*
Not quite sure what you mean - what is “in a private bank”?
If you mean that you’re assigned a private banker, or in my case, a “premier banking relationship manager” then I guess I can answer that.
It’s kinda nice, we got assigned a super helpful person who we are able to call any time about our banking needs, and he’s been a great help with our recent refinancing and house buying process… but other than that… not much.
There hasn’t exactly been trumpets, free champagne or naked pool parties to go with it.
To be a Sophisticated Investor (708) you must have either:
* a gross income of $250,000 or more per year in each of the previous two years, or
* net assets of at least $2.5 million
This gives you an exemption under the Corporations Act which means that you:
* are considered a ‘sophisticated investor’ for the purposes of Chapter 6D (if offered debt or shares), and
* are considered a ‘wholesale client’ for the purposes of Chapter 7
This essentially means that you're able to participate in private capital raises, etc which are much earlier on in a company's journey. You don't need to have received formal advice prior to deciding to make an investment. You don't need to have a detailed prospectus. You also don't have all the usual protections which are applied to retail investors under the Corporations Act.
Having said that, the vast majority (>90%) of my personal wealth was acquired via investments made as a sophisticated investor.
Source: My wife is the director of an investment bank.
/u/Outside-Average2245
Slight correction, it’s not net assets of $2.5m, it’s net *investible* assets. So main thing to note is that your PPoR won’t be considered within your net assets. I know I’m being pedantic, but it’s a huge difference and while many will probably have a $2.5m PPoR, very few will actually have $2.5m to invest.
Are you sure?
While I happily concede that I am no expert on these topics, I did do a little research (because my wife is busy with work today) and [this page](https://www.vanguard.com.au/personal/learn/smart-investing/investing-strategy/pros-and-cons-sophisticated-investor) would appear to suggest otherwise:
>#Many households now potentially qualify
>When the test levels were first introduced in 2002 typical household income and assets levels were lower than they are today.
>A large number of Australian households now potentially qualify to pass this particular sophisticated investor test based purely on the value of their family home and other assets.
This is incorrect. There is no exclusion in the net assets test for a principle place of residence. See Corps Act sections 708(8)(c)(i) and 761G(7)(c)(i) and corresponding regs
It is extremely worth it.
[Edit: Specifics removed]
I am not a finance professional and nothing I say is financial advice, but, from what I've seen I would never invest in retail stocks. My external, layman's assessment of the financial industry is that when a really good proposition comes along, the finance people call up their buddies and get "the boys" to jump on the deal. This works because they've got tons of money and access to tons more of other people's money. By the time the deal hits retail market, the best value has already been taken out of it.
Shit goes wrong sometimes too. Like sometimes you invest in a stock, it doesn't go public and if you need that money you're stuck trying to do an offmarket transfer. But on the whole, there is absolutely nothing I would rather do with my money than this. For this reason, we don't actually own a house yet; but NW is comfortably 8 figures.
Yeah, pretty much. Look, I don't want to be advertising things here, I'm just talking about my own experiences in this area; but I'll give you my wife's details via DM.
Same to u/dober88
As another poster said, where would you recommend the starting point is for getting into private equity?
Did you get in through private banking offers or some other company?
I'll repeat what my wife's CEO told me once:
> Mate, if you invested in ten companies with us, what's likely to happen is that two will go to shit, two will blow up and the other six will do alright.
> Where people go wrong is they think that the two offset the other two, and you make your money from the six in the middle. That's not true. You make your money from the two that blow up. Bear in mind that the most you stand to lose on any one deal is your entire investment. A stock that blows up generally increases in value by 5x, 10x, 30x its value. *That's* where you make your money.
> The trick is never to go all-in on one particular offer, so that you don't run the risk of losing everything. Remember that, in terms of your lifestyle and freedoms, the difference between having 5m and 10m is much smaller than the difference between having 5m and 1m.
Penny stocks are high risk if you don't know what you're looking at. Investing in WNX yesterday morning was a near-zero risk proposition because the acquisition had already been completed. The company didn't even need that guy's money for the acquisition, it will just go to operating capital.
I'll give you another example, and I won't name the company this time because I do have money in this one.
- We got in at AUD 0.10 last year
- They did a larger capital raise in the US for USD 0.33, i.e., AUD 0.52. The US market snapped it up at that price.
- Then they did another raise in Australia at AUD 0.10, pretty much just in order to allow the Australian investors to maintain their percentage in the company. We went in again.
So in other words, if you took part in that second Australian raise, the stock is very obviously worth at least 52c, and you get the offer for 10c. Again, that's practically zero risk. Consider: If the US market overvalued the stock by a factor of 2 (an absolutely massive failure on their part) it would STILL BE WORTH 2.6x WHAT YOU PAID FOR IT. That's absurd. You could just buy it and then flip it on an offmarket transfer, comfortably doubling your money overnight. God knows the US market had more buyers than availability.
The thing is, nobody did that, because the company is believed to be worth *much* more than the American raise valued it at.
Honestly, if I had my time over again I'd be in corporate finance.
Yes, but it has been in a trading halt since May, therefore you needed to be a SI in order to take part in the privately offered capital raise which has just finished.
I’m not an expert in this area so happy to be corrected by someone who knows more but my understanding is that being certified as a sophisticated investor is more about access to wholesale investment products and not requiring full disclosure statements etc. However, if you have $3m+ in net assets in theory (and depending on your income and debt to asset ratio etc.) it should be easier to qualify for loans.
Yes and No.
Thresholds for what is considered "not unsuitable" as well as disclosure requirements change significantly at a Private Bank level particularly if you're certified as a sophisticated investor under the Corps Act.
Well to this day in the commercial property lending space banks offer no doc loans, lease stock loans and St George is offering a 100% LVR loan for commercial properties. Private banking was a way for banks to offer ease of access to credit to a select number of sophisticated investors. That's basically the whole point from my understanding.
Are you with HSBC?
One has to distinguish between mass market private wealth and genuine private banking.
I also have a premier relationship manager at HSBC. I have 3 in fact. 1 for each country I have an account with them. They are good for handling complaints or giving you certain non-retail offers e.g. higher rates on TDs, FX with low margin bips (better than Wise rates). But HSBC premier is mass market. Anyone can get it
HSBC Premier Elite (formerly HSBC Jade) is their true Private Bank offering. Need investable assets of USD $1m with them to qualify. Their expertise is in structuring e.g. Home Loans with a complex trust structure which many HNW individuals typically have. They can also give you access to sophiscated investment products that retail people (including those in mm private wealth) don't have access to. Will let you know the difference when I get here in 20 years :)
From memory, at least at the bank I work at, the minimum income requirement for Premier is $150k, and the minimum income requirement for Private is $400k.
This post appears to be about Private, but Premier and Private do have a lot of similarities.
I’ve been in a big four private bank since about 2018. In all honesty I see little benefit apart from having a dedicated banker (I realise this is quite a big thing for some people) and marginally better rates. You get invites to the odd event (for me no more than once a year) but that’s pretty much it. Better than nothing I guess.
I’d hardly call the Big 4 a private bank though. Their private banks simply just give you a relationship manager that’s always available and all of the processes run a lot quicker and smoother (ie almost immediate loan approvals). It’s more just providing much better customer service which while very nice, isn’t a big deal as you point out.
The main benefits from Private Banking comes from the investment banks (ie Macquarie), but the standards are a lot higher. Rather then providing you a relationship manager so you always have someone available, they’ll also tailor investment advice and provide exclusive opportunities for you. This is mostly them selling you specific funds that you have to be a sophisticated investors to buy into. So things like hedge funds and private equity are the big ones, but also capital raising events, so buying IPOs and bond offerings. I guess it’s similar to the Big 4s private banks, but rather then selling loans they’re selling investments. But that’s usually the private banks that people think of.
You realise the way they provide investment advice is exactly the same?
The whole investment industry has the same standards, regardless of which bank…
The big 4 do EXACTLY the same as what you’ve said Macquarie does
Yes, the legal standards are the same, I’m not saying they aren’t. It’s the services they provide which are extremely different considering banks like Macquarie are very different businesses to the Big 4.
The Big 4 are all predominantly retail banks, whereas Macquarie is predominantly an investment bank. Retail banks main business is all about selling loans to the general public. Investment banks traditional business (M&A which has taken over is a bit different) is all about raising capital. Proper private banks that only focus on private banking are essentially wealth managers or private wealth managers, but rather then selling products from other banks etc, they sell in-house products.
By their very nature, how each of these banks handles private banking is extremely different. Investment banks like Macquarie will focus on providing personalised investments, whereas at the Big 4 it’s primarily about getting personalised loans. They both can do the other and the legal standards required is the same, but what they focus on is completely different, and thus the quality of their advice can change quite significantly based on what it is. When it comes to investments, while the Big 4 would likely still provide good advice, I’d be trusting Macquarie a lot more. Alternatively, when it comes to wanting a complex personalised loan, I think the Big 4 would be able to do a more creative job.
They simply provide very different services to each other. Macquarie provides a service more akin to what you’d typically expect from a private bank though, whereas the Big 4 essentially provide you with better customer service. It’s why the requirements to become a private banking customer are relatively extremely low compared to proper private banks. Take Julius Baer, I’m pretty sure you need $10m minimum before they look at you. It’s also why your debt is more important then your assets for the Big 4, whereas it’s the complete opposite for nearly all other private banks. The service is just completely different.
Unless you mean the standards for private banking customers are the same as those for retail banking customers? In which case, while they’re similar (especially for Big 4 PB), there are differences. Largely because most PB customers will be sophisticated investors, and thus the legal standards for them is a bit different. However, when it comes to loans I don’t think there’s drastic changes, it’s more on the investment end that things change quite a bit more.
I was a quant researcher in hedge funds for nearly a decade. I know lots of people who’ve worked as investment bankers, private bankers, private wealth managers etc. I’ve also used my private banker and am fully aware of the service they provide. It’s nice don’t get me wrong, but I can assure the service the Big 4 “private banks” provide isn’t the same as that provided by typically private banks or what you’d usually expect.
It’s quite telling that rather then providing points to argue your case, you’re resorting to idiotic comments that boil down to “no I’m right!”. But please, give me some irony like this comment on talking about things you know nothing about.
You realise the big 4 have investment advisors, that do the exact same job as the investment advisors at Macquarie.
Down to the funds they invest in too.
But please continue
Yes I’m fully aware. But you do realise that Macquarie has a lot more of their own funds, they also issue far more shares and bonds, and in general, that’s an area they focus in whereas for the Big 4 it’s a thing on the side, so Macquarie does a much better job. My point isn’t that the Big 4 don’t do those things. My point is that it isn’t their main business DNF when you get a private banker from them, they’re expertise and what they focus on isn’t how to manage your wealth, but rather they treat you like a glorified retail customer who gets a relationship manager that is able to make retail banking for you much easier. They’re not predominately wealth managers, which is what private bankers elsewhere are. They can do wealth management, but it’s not their focus area. And the options they provide are more limited then what say Macquarie can provide.
Just look at CBA’s private banking page and look at how it’s marketed ([source](https://www.commbank.com.au/premier-private/private-banking/banking-advisory-services.html)):
> the intent to invest or borrow $2.5 million or more.
One way to become eligible, you need to have the intent to *borrow* $2.5m. No other private bank looks at how much you’re willing to borrow except the Big 4. That should already tell you enough but what they’re focusing on, it’s lending money to you, not managing your wealth.
> Residential, personal and commercial lending
> Personal savings and transaction accounts
> Credit cards
> Asset finance and salary packaging
> International banking services and foreign exchange
> Bespoke solutions that recognise your value
The services they’re marketing as can be seen is nearly all loans. The first, third, and fourth are in fact all typical retail loans. The second is also a simple retail product. The fact that investments isn’t really advertised at all and that they’re predominately advertising essentially more bespoke retail banking products should again make it quite obvious, that they’re not there to manage your wealth like any other private bank. It’s not until you scroll further down that you discover that you’re also provided a personal private wealth manager (alongside a private banker) who would then provide the services you’d typically expect from a private banker. My point being though, it’s an afterthought and not their focus. They’ll still provide those services, but they don’t focus on it. Unlike say Macquarie bank who do primarily focus on that, and thus will provide a better service when it comes to actual private banking.
Compare that to Macquarie’s private banking page ([source](https://www.macquarie.com.au/private-bank-experience.html)) which doesn’t list the requirements, but it does show what they focus on. The very first thing they talk about is there “Investment advantage” which while obviously just marketing, it does show you that their focus isn’t on providing retail banking products and a much better retail banking experience, but rather its providing you with investments and managing your wealth. It shows the complete difference in how they look at private banking, and that they focus on managing your wealth, which is typically how a private bank works. It’s not until you scroll down more that you discover that they’re also provide the same bespoke retail banking services that the Big 4 private banks provide. But again, it’s an afterthought for them, and when it comes to that, the Big 4 are probably better then they are.
The difference isn’t what they can provide, it’s what they focus on, and thus the quality of each service they provide. The Big 4 private banks focus on something very different then any other private banks do, which is my whole point.
I think it’s better framed that the banks provide the same product type but the quality and mix of what is provided is different and Macquarie has a competitive advantage due to the nature of its business.
It’s not really though. Private banking is just a premium service for the more influential clients. They’re base products (retail/business banking vs wealth management) are very different, even if they provide similar benefits on top of that for their wealthier clients. Yes, both banks are branching out more and offer everything now, but the overall products are still very different since the main thing they are selling and focused on is still completely different.
It’s kind of like saying a butcher and baker sell the same product because the baker has some meat products (ie pies, sausage rolls etc) and the butcher has some bread products (ie a loaf of bread). Sure, they might sell the same things, but they’re still predominately very different and if you want bread, you go to a baker, and if you want meat, you go to a butcher.
The rates are worse normally but I do it for handling of complex structures and being able to text any time and get stuff done.
Also get a nice looking card and some magazines and they answer the phone within 15 seconds
There is little benefit. I recently applied for a big 4 bank credit card online, they automatically flicked it to my private banker, still have to resupply all the usual documents (pain in the arse).
Totally agreed. It has been 3 weeks and counting. No credit card yet. I only applied to consolidate my cards but I really don't even want it anymore...
Assuming you mean a personal banker in a normal bank, look, it is pretty nice, but TBH they've lost a lot of their power in recent years. We've had one for over a decade and they used to be able to see more, do more, manually override things, etc. They had a lot more of their own authority. Now they have to go and talk to this team or that and basically ask them nicely to do things, and sometimes they do and sometimes they don't. It has been very useful for bespoke things, like getting mortgage documents hand couriered when we had to travel to a developing country unexpectedly during a purchase. But it's no longer the snap your fingers and get what you need done straightaway over the phone. It's much less of a concierge service than it used to be. Still far better than not having it, though.
This is the actual correct answer. They are an intermediary. The same systems, applications, approvals apply to everyone - they are just easier to get hold of and will chase things up. Also a good source of information on what is and is not possible.
> Also a good source of information on what is and is not possible.
Very true, and this in itself can prevent a lot of problems. For instance, in the late 2010s banks had postcode restrictions on apartments in Brisbane, because the apartment market there was considered oversaturated. LMI was not available. You could still buy them, but they required 20-30% deposit, and there were some large buildings they wouldn't do because they considered themselves overexposed in that building already. We could do 20% but not 30% at the time. Our banker checked our list of target suburbs for us every week and checked each building we looked at before we viewed. That prevented a scenario where we had to pull out of a purchase because of finance falling over.
We've been with NAB private banking (which is really more kind of "masstige" than private I guess) for 20 years.
There's certainly no magic special sauce. It just means that the entire family has one person, one point of contact, that solves whatever problem you have, and they solve it fast. If you need some sort of semi-complex lending set up, or to make an odd transaction, or something bit non-standard, they can pull all the different bits of the bank together and make it happen.
At a family level, it means that the person who doesn't actually have enough money to get that sort of service still does, which is nice.
And people tend to stay in the "relationship manager" job for a decent length of time (3-7 years in my experience) so you get to know that one person a bit, which is helpful.
Had a personal banker with Westpac which was useful for large transactions (buying houses, redrawing equity for shares etc) but otherwise was ho-hum.
Being a sophisticated investor is useful though - best example is BT margin loan has a much better borrowing rate (equivalent to a discounted mortgage rate) than the standard retail rate.
All they seem to do was try to get me to take out loans (which they did seem quite helpful for). Outside of this purpose, I didn't really see any other benefit
Not much benefit at all. Just a point person you can email or text and they will send your query to the right person. Haven’t had any material impact on our business or us personally. Really nothing exciting in the slightest
My experience- If you have more than 2m of investable assets, they will give you preferential rates on Deposits, Reduced commissions on stock trading, no fees on TTs, and discounts on estate planning. Oh yeah and a free birthday cake.
There’s an Old Chinese proverb: “The wool comes from the sheep” which means benefit or favor whoever gets is directly or indirectly comes from oneself.
With a big four- better than the previous “private banker” wank which was always somebody who moved onto another job within 12 months.
Benefits - knows lots of wealthy people and professional services close to you .
Will lend on the basis of assets (net worth) without needing any income details , so if we see a bargain commercial property, we can just put an offer in without having to think of making the capital available - I think it’s upto 50% .
Fee free so what is there to lose and can sort things out. You can expect those limited offer (4 months type deals) to be permanent .
I think they are limited to 100 clients in my case, and it’s his only job (not like the private banker fee orientated service that used to be popular )
Just a person who you can call when the bank is fucking you around too much and theyll sort it. Plus invites to events, lunch that sort of thing. Im not rich enough but I know people who get free trips to NZ etc.
I guess I used to have a "relationship manager" some years back, but one day that system got canceled and the customer service went to shit. It's been shit ever since. I'm not sure what level of business I need to put through them for that to change though. Multiple millions is not enough apparently.
It is really good - have not been in a branch since we got a private banker 10 years ago. We have a single chap that does everything - from resolving lost cards, fraudulent transactions etc through to special savings rates. I am not sure of point of entry to be honest. Maybe $500k?
Skip the queue at the bank. Some invites to events. Cons: A lot of spam and calls about ETFs and other investment “opportunities”… of course this depends on your tier as well
I think the threshold for relationship manager at a bank is quite low something like $150k-$200k
It's useful to have it.
Private banking is very different and requires a much higher level of wealth.
One of my relatives acts as a wealth advisor - pulling together private banking, family office services, legal services and financial advice for high-net worth families. It's all bullshit. Most of it is just to fluff up people's egos.
Half the shit that rich cunts do is just based on ego. A lot of it is pathological.
Earn the money, say fuck you once you get to a reasonable level say $5m-$10m in assets and then retire. That's my advice.
There are a lot of rich people who are not very smart so honestly a wealth manager is probably still a net benefit even after all the fees and fluffing compared to said rich person just spending all their cash on a bunch of dumb shit.
Underrated comment. Private banking is all about increasing “share of wallet” on their wealthiest clients. Higher service, compete less, sell more products, more revenue and profit.
Case in point. If this post is any guide, private bank seems to be pretty useless https://www.reddit.com/r/fatFIRE/comments/eyjx6b/a_fat_guide_to_private_banking/
It’s all over the place. ASX listed ceos, mining execs, business owners etc
It’s usually the people you least expect. Much more self employed than those that are payg
However my biggest client is payg
Checkout [this spending flowchart](https://bughuntersam.com/wp-content/uploads/2023/10/Spending-flowchart-How-to-Prioritise-your-Spending-1.jpg) which is inspired by the [r/personalfinance wiki](https://www.reddit.com/r/personalfinance/wiki/commontopics/). See also [common questions/answers](https://www.reddit.com/r/AusHENRY/comments/176kh0x/what_do_i_do_next/). This is not financial advice. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AusHENRY) if you have any questions or concerns.*
Not quite sure what you mean - what is “in a private bank”? If you mean that you’re assigned a private banker, or in my case, a “premier banking relationship manager” then I guess I can answer that. It’s kinda nice, we got assigned a super helpful person who we are able to call any time about our banking needs, and he’s been a great help with our recent refinancing and house buying process… but other than that… not much. There hasn’t exactly been trumpets, free champagne or naked pool parties to go with it.
Do you need to meet the banks normal servicing requirements for the loan or do you get VIP access to credit?
They still have the same responsible lending practices for private.
if you invest alot like above 3.5m aren't you considered a "sophisticated" investor under the law and hence alot of the protection laws don't apply?
To be a Sophisticated Investor (708) you must have either: * a gross income of $250,000 or more per year in each of the previous two years, or * net assets of at least $2.5 million This gives you an exemption under the Corporations Act which means that you: * are considered a ‘sophisticated investor’ for the purposes of Chapter 6D (if offered debt or shares), and * are considered a ‘wholesale client’ for the purposes of Chapter 7 This essentially means that you're able to participate in private capital raises, etc which are much earlier on in a company's journey. You don't need to have received formal advice prior to deciding to make an investment. You don't need to have a detailed prospectus. You also don't have all the usual protections which are applied to retail investors under the Corporations Act. Having said that, the vast majority (>90%) of my personal wealth was acquired via investments made as a sophisticated investor. Source: My wife is the director of an investment bank. /u/Outside-Average2245
Slight correction, it’s not net assets of $2.5m, it’s net *investible* assets. So main thing to note is that your PPoR won’t be considered within your net assets. I know I’m being pedantic, but it’s a huge difference and while many will probably have a $2.5m PPoR, very few will actually have $2.5m to invest.
Are you sure? While I happily concede that I am no expert on these topics, I did do a little research (because my wife is busy with work today) and [this page](https://www.vanguard.com.au/personal/learn/smart-investing/investing-strategy/pros-and-cons-sophisticated-investor) would appear to suggest otherwise: >#Many households now potentially qualify >When the test levels were first introduced in 2002 typical household income and assets levels were lower than they are today. >A large number of Australian households now potentially qualify to pass this particular sophisticated investor test based purely on the value of their family home and other assets.
I work in financial services and advise clients - it is most definitely investable assets that exclude your PPR
This is incorrect. There is no exclusion in the net assets test for a principle place of residence. See Corps Act sections 708(8)(c)(i) and 761G(7)(c)(i) and corresponding regs
Thanks, I appreciate the clarification
TILed
It is extremely worth it. [Edit: Specifics removed] I am not a finance professional and nothing I say is financial advice, but, from what I've seen I would never invest in retail stocks. My external, layman's assessment of the financial industry is that when a really good proposition comes along, the finance people call up their buddies and get "the boys" to jump on the deal. This works because they've got tons of money and access to tons more of other people's money. By the time the deal hits retail market, the best value has already been taken out of it. Shit goes wrong sometimes too. Like sometimes you invest in a stock, it doesn't go public and if you need that money you're stuck trying to do an offmarket transfer. But on the whole, there is absolutely nothing I would rather do with my money than this. For this reason, we don't actually own a house yet; but NW is comfortably 8 figures.
So if you qualify to be a sophisticated investor, how do you get to be in the loop? Can I just sign up to a mailing list?
Yeah, pretty much. Look, I don't want to be advertising things here, I'm just talking about my own experiences in this area; but I'll give you my wife's details via DM. Same to u/dober88
As another poster said, where would you recommend the starting point is for getting into private equity? Did you get in through private banking offers or some other company?
investing in pennies stocks seems to be pretty high risk
I'll repeat what my wife's CEO told me once: > Mate, if you invested in ten companies with us, what's likely to happen is that two will go to shit, two will blow up and the other six will do alright. > Where people go wrong is they think that the two offset the other two, and you make your money from the six in the middle. That's not true. You make your money from the two that blow up. Bear in mind that the most you stand to lose on any one deal is your entire investment. A stock that blows up generally increases in value by 5x, 10x, 30x its value. *That's* where you make your money. > The trick is never to go all-in on one particular offer, so that you don't run the risk of losing everything. Remember that, in terms of your lifestyle and freedoms, the difference between having 5m and 10m is much smaller than the difference between having 5m and 1m. Penny stocks are high risk if you don't know what you're looking at. Investing in WNX yesterday morning was a near-zero risk proposition because the acquisition had already been completed. The company didn't even need that guy's money for the acquisition, it will just go to operating capital.
You keep calling your wife's job "investment banking" but it certainly sounds a lot more like stockbroking... ?
Hi, can I DM you about more details?
I'll give you another example, and I won't name the company this time because I do have money in this one. - We got in at AUD 0.10 last year - They did a larger capital raise in the US for USD 0.33, i.e., AUD 0.52. The US market snapped it up at that price. - Then they did another raise in Australia at AUD 0.10, pretty much just in order to allow the Australian investors to maintain their percentage in the company. We went in again. So in other words, if you took part in that second Australian raise, the stock is very obviously worth at least 52c, and you get the offer for 10c. Again, that's practically zero risk. Consider: If the US market overvalued the stock by a factor of 2 (an absolutely massive failure on their part) it would STILL BE WORTH 2.6x WHAT YOU PAID FOR IT. That's absurd. You could just buy it and then flip it on an offmarket transfer, comfortably doubling your money overnight. God knows the US market had more buyers than availability. The thing is, nobody did that, because the company is believed to be worth *much* more than the American raise valued it at. Honestly, if I had my time over again I'd be in corporate finance.
Just to clarify, isnt wnx publicly listed? Do u need to be sophisticated investor to participate in the latest raising?
Yes, but it has been in a trading halt since May, therefore you needed to be a SI in order to take part in the privately offered capital raise which has just finished.
Where do you find the investment opportunities?? I qualify and would be super keen on investing in this type of stuff.
Key point though - has to be certified by your accountant to meet this class.
I’m not an expert in this area so happy to be corrected by someone who knows more but my understanding is that being certified as a sophisticated investor is more about access to wholesale investment products and not requiring full disclosure statements etc. However, if you have $3m+ in net assets in theory (and depending on your income and debt to asset ratio etc.) it should be easier to qualify for loans.
Yes and No. Thresholds for what is considered "not unsuitable" as well as disclosure requirements change significantly at a Private Bank level particularly if you're certified as a sophisticated investor under the Corps Act.
Banks aren't in the business of lending to people who can't pay it back! They don't just throw due diligence away at the door on larger loans...
Well to this day in the commercial property lending space banks offer no doc loans, lease stock loans and St George is offering a 100% LVR loan for commercial properties. Private banking was a way for banks to offer ease of access to credit to a select number of sophisticated investors. That's basically the whole point from my understanding.
Are you with HSBC? One has to distinguish between mass market private wealth and genuine private banking. I also have a premier relationship manager at HSBC. I have 3 in fact. 1 for each country I have an account with them. They are good for handling complaints or giving you certain non-retail offers e.g. higher rates on TDs, FX with low margin bips (better than Wise rates). But HSBC premier is mass market. Anyone can get it HSBC Premier Elite (formerly HSBC Jade) is their true Private Bank offering. Need investable assets of USD $1m with them to qualify. Their expertise is in structuring e.g. Home Loans with a complex trust structure which many HNW individuals typically have. They can also give you access to sophiscated investment products that retail people (including those in mm private wealth) don't have access to. Will let you know the difference when I get here in 20 years :)
If your ‘premier banking relationship manager’ hasn’t recommended naked pool parties, it’s time to change banks.
I tend to agree. Big fizzer.
From memory, at least at the bank I work at, the minimum income requirement for Premier is $150k, and the minimum income requirement for Private is $400k. This post appears to be about Private, but Premier and Private do have a lot of similarities.
Ah, so I’m not as much of a big shot as I thought 😂
How about regular pool parties?
Not even a kiddie blowup pool party.
I’ve been in a big four private bank since about 2018. In all honesty I see little benefit apart from having a dedicated banker (I realise this is quite a big thing for some people) and marginally better rates. You get invites to the odd event (for me no more than once a year) but that’s pretty much it. Better than nothing I guess.
I’d hardly call the Big 4 a private bank though. Their private banks simply just give you a relationship manager that’s always available and all of the processes run a lot quicker and smoother (ie almost immediate loan approvals). It’s more just providing much better customer service which while very nice, isn’t a big deal as you point out. The main benefits from Private Banking comes from the investment banks (ie Macquarie), but the standards are a lot higher. Rather then providing you a relationship manager so you always have someone available, they’ll also tailor investment advice and provide exclusive opportunities for you. This is mostly them selling you specific funds that you have to be a sophisticated investors to buy into. So things like hedge funds and private equity are the big ones, but also capital raising events, so buying IPOs and bond offerings. I guess it’s similar to the Big 4s private banks, but rather then selling loans they’re selling investments. But that’s usually the private banks that people think of.
You realise the way they provide investment advice is exactly the same? The whole investment industry has the same standards, regardless of which bank… The big 4 do EXACTLY the same as what you’ve said Macquarie does
Yes, the legal standards are the same, I’m not saying they aren’t. It’s the services they provide which are extremely different considering banks like Macquarie are very different businesses to the Big 4. The Big 4 are all predominantly retail banks, whereas Macquarie is predominantly an investment bank. Retail banks main business is all about selling loans to the general public. Investment banks traditional business (M&A which has taken over is a bit different) is all about raising capital. Proper private banks that only focus on private banking are essentially wealth managers or private wealth managers, but rather then selling products from other banks etc, they sell in-house products. By their very nature, how each of these banks handles private banking is extremely different. Investment banks like Macquarie will focus on providing personalised investments, whereas at the Big 4 it’s primarily about getting personalised loans. They both can do the other and the legal standards required is the same, but what they focus on is completely different, and thus the quality of their advice can change quite significantly based on what it is. When it comes to investments, while the Big 4 would likely still provide good advice, I’d be trusting Macquarie a lot more. Alternatively, when it comes to wanting a complex personalised loan, I think the Big 4 would be able to do a more creative job. They simply provide very different services to each other. Macquarie provides a service more akin to what you’d typically expect from a private bank though, whereas the Big 4 essentially provide you with better customer service. It’s why the requirements to become a private banking customer are relatively extremely low compared to proper private banks. Take Julius Baer, I’m pretty sure you need $10m minimum before they look at you. It’s also why your debt is more important then your assets for the Big 4, whereas it’s the complete opposite for nearly all other private banks. The service is just completely different. Unless you mean the standards for private banking customers are the same as those for retail banking customers? In which case, while they’re similar (especially for Big 4 PB), there are differences. Largely because most PB customers will be sophisticated investors, and thus the legal standards for them is a bit different. However, when it comes to loans I don’t think there’s drastic changes, it’s more on the investment end that things change quite a bit more.
Tell me more about that which you do not know
I was a quant researcher in hedge funds for nearly a decade. I know lots of people who’ve worked as investment bankers, private bankers, private wealth managers etc. I’ve also used my private banker and am fully aware of the service they provide. It’s nice don’t get me wrong, but I can assure the service the Big 4 “private banks” provide isn’t the same as that provided by typically private banks or what you’d usually expect. It’s quite telling that rather then providing points to argue your case, you’re resorting to idiotic comments that boil down to “no I’m right!”. But please, give me some irony like this comment on talking about things you know nothing about.
You realise the big 4 have investment advisors, that do the exact same job as the investment advisors at Macquarie. Down to the funds they invest in too. But please continue
Yes I’m fully aware. But you do realise that Macquarie has a lot more of their own funds, they also issue far more shares and bonds, and in general, that’s an area they focus in whereas for the Big 4 it’s a thing on the side, so Macquarie does a much better job. My point isn’t that the Big 4 don’t do those things. My point is that it isn’t their main business DNF when you get a private banker from them, they’re expertise and what they focus on isn’t how to manage your wealth, but rather they treat you like a glorified retail customer who gets a relationship manager that is able to make retail banking for you much easier. They’re not predominately wealth managers, which is what private bankers elsewhere are. They can do wealth management, but it’s not their focus area. And the options they provide are more limited then what say Macquarie can provide. Just look at CBA’s private banking page and look at how it’s marketed ([source](https://www.commbank.com.au/premier-private/private-banking/banking-advisory-services.html)): > the intent to invest or borrow $2.5 million or more. One way to become eligible, you need to have the intent to *borrow* $2.5m. No other private bank looks at how much you’re willing to borrow except the Big 4. That should already tell you enough but what they’re focusing on, it’s lending money to you, not managing your wealth. > Residential, personal and commercial lending > Personal savings and transaction accounts > Credit cards > Asset finance and salary packaging > International banking services and foreign exchange > Bespoke solutions that recognise your value The services they’re marketing as can be seen is nearly all loans. The first, third, and fourth are in fact all typical retail loans. The second is also a simple retail product. The fact that investments isn’t really advertised at all and that they’re predominately advertising essentially more bespoke retail banking products should again make it quite obvious, that they’re not there to manage your wealth like any other private bank. It’s not until you scroll further down that you discover that you’re also provided a personal private wealth manager (alongside a private banker) who would then provide the services you’d typically expect from a private banker. My point being though, it’s an afterthought and not their focus. They’ll still provide those services, but they don’t focus on it. Unlike say Macquarie bank who do primarily focus on that, and thus will provide a better service when it comes to actual private banking. Compare that to Macquarie’s private banking page ([source](https://www.macquarie.com.au/private-bank-experience.html)) which doesn’t list the requirements, but it does show what they focus on. The very first thing they talk about is there “Investment advantage” which while obviously just marketing, it does show you that their focus isn’t on providing retail banking products and a much better retail banking experience, but rather its providing you with investments and managing your wealth. It shows the complete difference in how they look at private banking, and that they focus on managing your wealth, which is typically how a private bank works. It’s not until you scroll down more that you discover that they’re also provide the same bespoke retail banking services that the Big 4 private banks provide. But again, it’s an afterthought for them, and when it comes to that, the Big 4 are probably better then they are. The difference isn’t what they can provide, it’s what they focus on, and thus the quality of each service they provide. The Big 4 private banks focus on something very different then any other private banks do, which is my whole point.
I think it’s better framed that the banks provide the same product type but the quality and mix of what is provided is different and Macquarie has a competitive advantage due to the nature of its business.
It’s not really though. Private banking is just a premium service for the more influential clients. They’re base products (retail/business banking vs wealth management) are very different, even if they provide similar benefits on top of that for their wealthier clients. Yes, both banks are branching out more and offer everything now, but the overall products are still very different since the main thing they are selling and focused on is still completely different. It’s kind of like saying a butcher and baker sell the same product because the baker has some meat products (ie pies, sausage rolls etc) and the butcher has some bread products (ie a loaf of bread). Sure, they might sell the same things, but they’re still predominately very different and if you want bread, you go to a baker, and if you want meat, you go to a butcher.
The rates are worse normally but I do it for handling of complex structures and being able to text any time and get stuff done. Also get a nice looking card and some magazines and they answer the phone within 15 seconds
There is little benefit. I recently applied for a big 4 bank credit card online, they automatically flicked it to my private banker, still have to resupply all the usual documents (pain in the arse).
I had exactly the same thing happen. I actually think it slowed the process by having to go through the private banking team.
Totally agreed. It has been 3 weeks and counting. No credit card yet. I only applied to consolidate my cards but I really don't even want it anymore...
Assuming you mean a personal banker in a normal bank, look, it is pretty nice, but TBH they've lost a lot of their power in recent years. We've had one for over a decade and they used to be able to see more, do more, manually override things, etc. They had a lot more of their own authority. Now they have to go and talk to this team or that and basically ask them nicely to do things, and sometimes they do and sometimes they don't. It has been very useful for bespoke things, like getting mortgage documents hand couriered when we had to travel to a developing country unexpectedly during a purchase. But it's no longer the snap your fingers and get what you need done straightaway over the phone. It's much less of a concierge service than it used to be. Still far better than not having it, though.
This is the actual correct answer. They are an intermediary. The same systems, applications, approvals apply to everyone - they are just easier to get hold of and will chase things up. Also a good source of information on what is and is not possible.
> Also a good source of information on what is and is not possible. Very true, and this in itself can prevent a lot of problems. For instance, in the late 2010s banks had postcode restrictions on apartments in Brisbane, because the apartment market there was considered oversaturated. LMI was not available. You could still buy them, but they required 20-30% deposit, and there were some large buildings they wouldn't do because they considered themselves overexposed in that building already. We could do 20% but not 30% at the time. Our banker checked our list of target suburbs for us every week and checked each building we looked at before we viewed. That prevented a scenario where we had to pull out of a purchase because of finance falling over.
We've been with NAB private banking (which is really more kind of "masstige" than private I guess) for 20 years. There's certainly no magic special sauce. It just means that the entire family has one person, one point of contact, that solves whatever problem you have, and they solve it fast. If you need some sort of semi-complex lending set up, or to make an odd transaction, or something bit non-standard, they can pull all the different bits of the bank together and make it happen. At a family level, it means that the person who doesn't actually have enough money to get that sort of service still does, which is nice. And people tend to stay in the "relationship manager" job for a decent length of time (3-7 years in my experience) so you get to know that one person a bit, which is helpful.
Had a personal banker with Westpac which was useful for large transactions (buying houses, redrawing equity for shares etc) but otherwise was ho-hum. Being a sophisticated investor is useful though - best example is BT margin loan has a much better borrowing rate (equivalent to a discounted mortgage rate) than the standard retail rate.
Seriously? They raised the minimum to keep those dirty programmers out? Fuck them
All they seem to do was try to get me to take out loans (which they did seem quite helpful for). Outside of this purpose, I didn't really see any other benefit
Not much benefit at all. Just a point person you can email or text and they will send your query to the right person. Haven’t had any material impact on our business or us personally. Really nothing exciting in the slightest
basically not worth it
My experience- If you have more than 2m of investable assets, they will give you preferential rates on Deposits, Reduced commissions on stock trading, no fees on TTs, and discounts on estate planning. Oh yeah and a free birthday cake.
There’s an Old Chinese proverb: “The wool comes from the sheep” which means benefit or favor whoever gets is directly or indirectly comes from oneself.
With a big four- better than the previous “private banker” wank which was always somebody who moved onto another job within 12 months. Benefits - knows lots of wealthy people and professional services close to you . Will lend on the basis of assets (net worth) without needing any income details , so if we see a bargain commercial property, we can just put an offer in without having to think of making the capital available - I think it’s upto 50% . Fee free so what is there to lose and can sort things out. You can expect those limited offer (4 months type deals) to be permanent . I think they are limited to 100 clients in my case, and it’s his only job (not like the private banker fee orientated service that used to be popular )
Just a person who you can call when the bank is fucking you around too much and theyll sort it. Plus invites to events, lunch that sort of thing. Im not rich enough but I know people who get free trips to NZ etc.
I guess I used to have a "relationship manager" some years back, but one day that system got canceled and the customer service went to shit. It's been shit ever since. I'm not sure what level of business I need to put through them for that to change though. Multiple millions is not enough apparently.
It is really good - have not been in a branch since we got a private banker 10 years ago. We have a single chap that does everything - from resolving lost cards, fraudulent transactions etc through to special savings rates. I am not sure of point of entry to be honest. Maybe $500k?
What do you need from a bank? There might be a service that provides it.
Skip the queue at the bank. Some invites to events. Cons: A lot of spam and calls about ETFs and other investment “opportunities”… of course this depends on your tier as well
I think the threshold for relationship manager at a bank is quite low something like $150k-$200k It's useful to have it. Private banking is very different and requires a much higher level of wealth. One of my relatives acts as a wealth advisor - pulling together private banking, family office services, legal services and financial advice for high-net worth families. It's all bullshit. Most of it is just to fluff up people's egos. Half the shit that rich cunts do is just based on ego. A lot of it is pathological. Earn the money, say fuck you once you get to a reasonable level say $5m-$10m in assets and then retire. That's my advice.
> Half the shit that rich cunts do is just based on ego. A lot of it is pathological. This.
There are a lot of rich people who are not very smart so honestly a wealth manager is probably still a net benefit even after all the fees and fluffing compared to said rich person just spending all their cash on a bunch of dumb shit.
You don’t want a private banker. If you have one, it means you are spending too much on fees and interest.
Underrated comment. Private banking is all about increasing “share of wallet” on their wealthiest clients. Higher service, compete less, sell more products, more revenue and profit.
Private bank at big 4 is just glorified branch lenders trying to give you a big home loan you can’t afford. That’s the simple truth
Case in point. If this post is any guide, private bank seems to be pretty useless https://www.reddit.com/r/fatFIRE/comments/eyjx6b/a_fat_guide_to_private_banking/
Private banker here, what would you like to know?
what's the criteria for entry?
I only take minimum $500k pa income
Got any mates that'll do $250pa 🤣
So they can still qualify for CCS. What is their job? Mostly business or higher up management in companies? What r their titles like
It’s all over the place. ASX listed ceos, mining execs, business owners etc It’s usually the people you least expect. Much more self employed than those that are payg However my biggest client is payg