PLAY golf? Understand art? Consider a private banking career.
In developed western countries, a VIP client is generally someone who has inherited wealth and property. In Slovakia, this kind of wealth has been accumulating for only a decade. While banks in the West are looking after "old" money, banks in Slovakia are managing newly acquired wealth.
Eligibility criteria for becoming a VIP client vary. Each bank sets its own rules. An extraordinary volume of money almost guarantees membership, however it is not strictly necessary. Famous or respected personalities are often offered private banking services.
Local bankers say the private banking sector in developed countries far surpasses Slovakia in the volume of assets under management. In Western countries, a client is generally required to have €1 million before he or she is considered VIP. In Slovakia the minimum is significantly lower. Nevertheless, Slovak bankers expect the country's private banking sector will grow.
Marián Matušovič, who is responsible for VÚB's private banking services, described a typical private client in Slovakia.
"They are top managers, current or former owners of various businesses, lawyers, judges, sportsmen, artists. Generally they are people who are extremely busy and engaged in their work. Their success depends upon them constantly improving their skills and knowledge. If they have spare time, they want to devote it to their family, friends and hobbies. Simply, they have no time to look after their money and require a professional to do it for them."
According to Matušovič, the typical high net worth client at VÚB is a middle-aged man with at least Sk5 million (€130,000) in assets under management. Sometimes its clients have a less remarkable financial portfolio, something in the range of Sk3 million (€80,000) invested in various markets.
Private banking is also based on the principle of mutual trust. Banks expect to have a long-term relationship with their clients. And clients benefit from a banking institution that understands the client's needs through experience.
Roman Začka, director of Tatra banka's public relations department, said Tatra banka's private clients are those whose property requires a special care.
"A minimum amount of money for providing private banking services is definitely not set in our bank. In general, of course, our private clients possess above-average financial means. But the reason for classifying a client as a VIP or private client has to do with the amount of care his or her financial portfolio requires. We make our decisions more or less on a case to case basis," Začka said.
Eva Güttlerová, the spokesperson of Slovenská sporiteľňa (SLSP), told The Slovak Spectator that SLSP provides property management services to select clients if the volume of their financial assets is counted in the millions.
Private clients are generally cautious when it comes to investing. They prefer to have an untouchable nest egg before making any higher risk investments. They also like a certain control over their money.
"Private banking clients are various, but the majority of them are more conservative than retail clients. They usually put aside a certain reserve in case of 'bad times'. Above all, they are sophisticated. They want to know every product they buy in detail," said Matušovič from VÚB.
SLSP's Güttlerová added: "As for clients' priorities, in the first case they want to protect their financial assets against devaluation. Only after fulfilling this aim will they try to reach above-average returns on invested assets. Trust plays a main role here," she said.
Besides offering special advantages, banks provide private clients with products designed to fit their needs. Sometimes they create new services to fulfil clients' demands. This includes services that exceed the field of banking.
"There are several advantages that a private clients receives - discrete and fast care, special products that are offered only to them, as well as various discounts from fees."
He continued: "Because more and more of our private clients like having a good time with their money, we are able to advise them on how to spend their leisure time. For example, in cooperation with our Italian shareholders, we can arrange for them to attend an opera performance in La Scala, a football match of AC Milan or an F1 event at the Italian Monza."
According to Güttlerová, SLSP's private clients gain automatic access to all the bank's products and services. Professional management of financial assets with regular reporting on the development and performance of assets are standard services for such clients. A bank consultant in cooperation with a financial asset manager helps ensure an optimal product portfolio.
"Currently, our private clients' interests are moving away from purely banking products towards other financial market tools. Many clients have started to realize the opportunities that capital markets and securities bring," Güttlerová said.
The aim of private banking is to ensure that a client's financial demands are arranged as quickly, effectively and comfortably as possible.
Začka told The Slovak Spectator: "A private banker should be at the client's right hand whenever he needs him."
"After analyzing a client's needs," Začka continued, "a private banker proposes and explains a suitable structure of products. It is possible to vary standard terms of products. Every client is specific and we must respect that."
Banks attract and retain private clients by emphasizing long-term cooperation and trust. While advertising plays an important role in attracting retail clients, it does not work in the private banking sector.
"A bank offers its top clients private banking services. It also tries to attract respected or well-known people that could potentially have an interest in private banking services. We often get new clients based on references," said Matušovič from VÚB.
References are also important for Tatra banka, according to Začka. "Tatra banka has been a corporate bank for a long time. Its clients - business people and the bank - grew together. This, plus references, are important when it comes to attracting and retaining private clients."
With so many unique demands to fulfil, a private banker has a tough job.
According to Matušovič, an ideal private banker would be a middle-aged man, very communicative with about 10 years of experience in the financial sector. He would have good contacts and language skills. He would also possess a general knowledge of various topics such as the arts, sports, basically anything that could be of client interest. He would also play golf.
"Of course, the ideal private banker does not exist, but we are trying to select our staff in a way so they will get closer to that ideal after some training," Matušovič said.
SLSP noticed a trend in which private clients in Slovakia who have been using the private banking services of foreign banks are now looking for Slovak equivalents.
She said, "It gives them a chance to make decisions more often, and it avoids the language and distance barriers. However, clients still require a trustworthy person backed by a sound institution to fulfil their needs."
2. May 2005 at 0:00 | Marta Ďurianová