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The difference between investment and private banking

By NexChange
Wealth Management

Private Bank

Stiffer capital requirements and more onerous regulatory burdens have taken their toll on traditional investment banking activities. Sales and trading margins are also being undercut by new competitors as well as technologies that make an intermediary’s function redundant.

Some banks, notably Credit Suisse and Deutsche Bank a couple of months ago, are if not re-inventing themselves as private bankers then at least moving emphasis and resources to wealth management.

Investment bankers preparing to make a career shift might also need to reshape their mindset.

Investment banking is more like a sport and private banking is like an art, Ron Lee, head of private wealth management, Asia Pacific at Goldman Sachs tells Asian Private Banker. (paywall)

In investment banking, the winner is the person who first crosses the line. In private banking, things are more subjective. I’m more worried about finding the right bankers.

If you brought me 50 new bankers next year and I am totally confident in their ability to bring new business, I won’t worry too much about the competition. If can’t find five more bankers who can do so, it would make no difference if half our competitors left the industry, as business won’t just come to us because of less competition.

Photo: Elliott Brown


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