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Recently I sold my business in the U.A.E to a group of investors and my local partner and was fortunate to receive a generous offer even in these economic times. I am now looking to put this lump sum (in the 8 figure dirham range) to work for a mix of investment and ideas for my legacy and future generations. Here in lies the problem.

Read on to  find out more.

Two of the banks who I used to deal with on a corporate basis have passed on my reference to their private banking division. In addition, a few independent financial ad visors have also got in touch with me and both parties have made very good cases to manage my money. I like the private banking people as they have lots to offer me- stocks, bonds, trusts, estate planning- basically very interesting and exotic sounding options.  On the other hand the financial advisors are more personal and look at my finances in the same way and are good with taxes, and family law and the like.

I wanted to know when should one approach the services of a private bank or independent advisor and is it possible to have both at the same time given my options?

Thanks

Ben.

Tim replies:

Ben, there are number of issues here and there is no singular correct answer if that is what you seek. Clearly taking advice from as many sources as you feel comfortable and to a point that it is not overbearing is a very useful exercise. That said, there is a clear delineation between the services a Private Bank may offer and that of a Financial Advisor.

The offerings from Private Banks can differ greatly and you should familiarize yourself with the extent of their services particularly as your wealth evolves. Many banks prefer to limit their services to those that directly fall under their umbrella. Obviously this is the most profitable route for them but you could be restricted/unaware to alterative solutions. Open architecture particularly with competitive institutions is generally avoided hence your access to unbiased opinion could result. If the bank has their name on the solution being offered, ask why this is in your best interest and how it compares against a competitive alternative.  

If your financial advisor is independent i.e. he is not owned by a Financial or insurance institution then you should enjoy impartial advice on your finances. Knowing that your money will not be physically held by the advisor provides comfort and avoids any conflict of interest. Clearly checking the credentials and experience of your personal advisor in both instances is key and your research should tell you the range of services that both are willing to offer. Financial advisors are very used to bringing in additional expertise to meet the needs of the solution required generally at greatly reduced costs. Moreover, they can cater to private and corporate requirements particularly with regards to managing risk.

Seek written confirmation of the advice approach, credentials and service expectations from both parties. If you are happy mixing the skills of both service providers that is exactly what you can do. Globaleye are frequently asked to liaise with the legal, accounting and banking partners of our clients which makes sense when complex transactions, particularly for corporate clients, are at stake. Remember, once you have made the choice you can always change it and there are enough alternatives in the market only too keen to provide a solution that is tailored to your needs. Do your research, monitor regularly and get a referral – that is always a good start.