Private Investment Banking

This week, the topics are all related to international investing. Today, I will discuss the pinnacle of international investing, or private investment banking. Private investment banking is very different from retail banking at your local bank. They typically don't deal with the normal checking and saving accounts.

First of all, private investment banking is usually only available to high net worth individuals with liquidity of over one million dollars. However, in some cases with some private banks, this may be lowered to much lower. Others are becoming more exclusive raising the minimum investment to open an account $1.5 million.

The private banker is also different that your typical bank representative or bank manager. The private banker is either a wealthy owner or partner, and usually the bank takes on the name of the founder. The bank is elite, only known by a few, and has a philosophy rooted in over 200 years of tradition dedicated to private person-to-person banking.

The private banker is bound personally, financially, and professionally to his clients investments, meaning his banking commitments are guaranteed by his entire personal fortune and he bears personal responsibility for its sound administration. It is his unlimited liability as a private banker that determines the kind of operations he engages in; thus he is known for his wisdom in risk control and asset allocation.

He limits himself entirely to acting on his clients' best interests and instructions, managing their assets, and providing related services. Such activities are seen as an extension of the administration of his own assets. In fact, much of the time, his own wealth is invested in the same endeavors.

Other qualities of the private investment banker are that he is a connoisseur of the international financial markets, focused on performance-oriented opportunities, and has unfailing respect of his clients' privacy. He serves both private and institutional clientele with renowned professionalism. Furthermore, he is defined by discretion, efficiency, and innovation, combined with integrity, stability, and continuity to suit multi-generational wealth building.

You might ask why privacy may be so important to some people. Disregarding the illegal activities of embezzlement, tax evasion, and money laundering, there are many reasons for bank privacy. Here are just some of the reasons:

• To hide it from friends, spouse or other family members
• To prevent confiscation of money, e.g. in the case of potential bankruptcy or litigation
• Privacy from press or publicity
• Protection from criminals
• Protection from over-bearing or corrupt local government agencies
• Protection from solicitation (This might include charities, venture capitalists seeking seed money, family members, beggars, or investment salesmen)

Unlike the United States where financial information is routinely and sometimes openly shared without your knowledge, consent, or compensation; the privacy banking laws in such countries as Switzerland, Austria, Lichtenstein, Luxembourg, Panama, and others are very strict. They will not share any information on their clients unless there is evidence that you are involved in illegal activities, and sometimes a conviction in international court or in that country is necessary. If anyone representing the bank does release any client information, they are committing a criminal offense subject to imprisonment and/or a monetary fine. The affected depositor may also sue the offending bank and bank employees involved, up to the amount of actual damages caused by the violation.

Be wary of countries that have signed "Tax Information Exchange Agreements" with the United States. These TIEA treaties are one sided agreements that allow the IRS and US government agencies to demand information from banks and other financial institutions on their clients.

There will be more on international investing tomorrow. Stay tuned ...

I want to give special thanks to the Cradle of Gold Society for most of the information presented.

A gossip betrays a confidence,
but a trustworthy man keeps a secret.

For lack of guidance a nation falls,
but many advisers make victory sure. Proverbs 11:13-14 (NIV)

If you have comments or questions, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com