What kind of customer tier should I be aiming at?

Question

I have about 2M EUR of savings, in all kind of supports (the choice of the supports was random or historic - not driven by any reasonable financial analysis).

Since I have no interest in managing this money myself, I am considering leaving this to a private bank.

There are roughly two kind of private banks in France: the ones which are "standalone" and oriented towards real fortunes (e.g. Rothschild) and ones which are attached to generally available banks (e.g. BNP Paribas).

The main difference to my untrained eye is in the entry levels: 1M+ for the former, 250-500k for the latter.

Is it more interesting to aim for the "entry level client" in the first kind of banks, or rather "mid level client" in the second one?

Both will certainly offer a similar gain (about 4% I guess) with, hopefully, a similar level of risk (please correct me if I am wrong). I do not expect miracles and would be worried if someone suggested some.

My concern is rather on

• the quality of the relationship: being at the bottom of the customer ladder vs being a bit higher, if it helps
• the investment portfolio, which may be different in the first case (oriented towards more wealthy clients) than in the second (oriented towards clients with less capacities, which mean some investments are off the table because, say, they require a larger entry capital not available to these customers, and therefore not offered in the portfolio at all)

Or maybe it does not matter much?

Answer 1

Let me answer a slightly different question. Note, I'm in Canada rather than France. I think most of my answer will apply, but hopefully someone in France can give you a more local answer.

You have enough saved up that it's worth your while to spend a few hours educating yourself. There are a number of good books and websites, and you can expect this time investment to pay back significantly in returns. And, "couch potato" strategies are pretty easy to pick up. You may well not want to worry about it and that's fine, you have enough money to trade future income for not bothering with these details.

Rather than relying on a bank, you may want to find a financial adviser. You want one you pay for their time, rather than a "free" financial adviser. The latter make their money off of what they sell you, meaning they are salespeople rather than people looking out for your best interests. Think: car salespeople. A car salesperson will certainly advise you buy a new car, and look, they have the perfect one in stock!

Expect to pay a four digit amount of money for a consultation with a financial adviser. Expect them to meet with you to determine the current state of your investments, your level of risk, your future goals, etc. And then expect them to come up with a plan to shuffle your investments around to fit your needs, and a plan to deal with future income.

But, to circle back to your question. It's likely that either type of bank will have the second sort of financial adviser, i.e. salespeople, rather than people looking out for your best interests. The key word here is "fiduciary". As neither sort of bank is likely to have fiduciary advisers, there's likely little difference in your expected returns and your risks, between either sort of bank.

Here in Canada, I appear to have been classified as an upscale client at my local bank. This mostly resulted in them trying to sit me down with more salespeople, rather than actually producing meaningful benefit to me. The one exception is when I ran into a service problem at the bank. My written complaint resulted in the bank manager calling me on the phone and apologising rather than losing my business. I expect that was a result of my classification, though Canadians are really polite and maybe they'd have done that with any customer. My experience weakly implies that there's not a huge amount of difference in your choices here (though you have more money to invest than I do). Being a mid-level client means the bank probably cares more if they are in danger of losing you. Being an entry-level client at a more upscale bank probably means more comfy chairs and better coffee, when you meet with them. In particular, this is an area where France may differ, so you should hope for someone with more local knowledge. :)