The villain in the latest James Bond film, Casino Royale, is a private banker. This will not come as a surprise to many IFAs who view private bankers as one of their natural competitors.
The private banker in question, Le Chiffre, acts as a banker to numerous terrorist groups. He also tries to profit from terrorist actions by selling short stocks of companies that are about to be attacked.
Even though this has effectively been made as the first-ever Bond film, it is topical in having not only a prominent private banker but also hedge fund investment techniques at the centre at the plot. Of course, private bankers would no doubt be keen to stress that their discrete and personal banking services are as far removed as it is possible to be from the high profile and corrupt Le Chiffre.
The attempt by Le Chiffre to blow up a plane is foiled by Bond. Le Chiffre, therefore, organises a poker game to try to win back his money. Bond and US CIA agent Felix Leiter are two of the players in this game.
While private bankers are unlikely to recognise themselves in the film, this does raise a question over how you define a private banker. The fact that the film played a private banker in this role reveals a lot about the public perception of this profession. This is that they are for the very wealthy only.
The truth is that there is no one definition of private banking. Private banks do not even all have a minimum investment requirement for clients, let alone the same one. Nevertheless, one US private bank in London says it does not have any clients with assets of less than £24m.
Traditionally, one would think of a private bank as providing a personal service that encompassed most, if not all, of a client’s financial planning needs. This might range from banking through investment management to tax and structuring.
But some private banks are little more than investment managers. Indeed, professional advisers complain that one high-profile London private bank with international offices simply tries to “sell its investments to clients”.
There are private banks that try to offer all services and products in-house while others outsource some of them. The range of services offered does vary significantly between private banks.
Does this matter to IFAs? It should do because for many advisers, private banks are potential competitors. If some private banks become little more than investment managers then this will be good news for those IFAs who provide a comprehensive financial planning service.
Simon Hildrey is a freelance journalist, specialising in the offshore financial services market.IFAonline
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