Private banks and wealth managers draw the line at clients who pilfer, swear or are otherwise badly behaved. Some firms are even putting together a more implicit framework of acceptable standards.
A super-rich client who swiped an entire bowl of chocolate truffles from a private bank’s reception; another who abused relationship managers with choice expletives; one who asked indecently about junior female employees: private banks are pushing back against all of these.
A recent article published in the «Financial Times» (behind paywall) lists bad behavior from clients as one reason private banks and wealth managers are refusing new clients or dropping existing ones. Despite the fierce competition for assets in what is a fragmented but lucrative market, these firms are screening prospects and clients with a finer lens than they did ever before.
Regular Appearance in the Tabloids
Outside of explicit policies regarding wealth provenance, some private banks are putting together a more implicit framework of acceptable standards that span how honest a client has been with the firm in all his dealings even though source of wealth has been verified, how he conducts himself in other areas of his life and the public perception of him. One more conservative London-based bank allegedly dropped a client due to his regular appearance in the tabloids.
Of course politically exposed people – the families of politicians or civil servants – will find it difficult to bank with most global institutions. UBS, for example, has put in place a policy that automatically disqualifies such persons as clients.
Rejecting Rather Than Chasing
The phenomenon of banks rejecting – rather than chasing – clients in what is traditionally a service-oriented industry must be a welcome development for regulators as well as those clients who pride themselves on adhering to higher standards.
