In fact, Johnson Bank offers nothing but private banking for affluent individuals and clients with single or multiple family-owned businesses, says Scott Cornelius, Arizona regional president.

“We’re a niche player,” Cornelius says. “We don’t have a private banking department. The whole bank is a private bank.”

There are no minimum-asset requirements to qualify for Johnson Bank’s services. Prospective clients are reviewed by the bank and accepted on a case-by-case basis. Johnson Bank prepares a total financial plan for clients, linking services to business needs when appropriate, Cornelius says. The plan includes traditional banking services such as checking, savings, money market accounts, credit cards and safe deposit. Mortgage services are offered, as well.

“Many of our customers have homes worth more than $1 million and second homes,” Cornelius says. “We provide expertise in handling all their mortgage needs.”

In terms of insurance services, Johnson Bank offers life insurance; insurance for homes, airplanes, and art and car collections; and key man insurance.

“If a key executive in their business dies, key man insurance provides cash to the organization to replace that individual,” Cornelius says.

For estate planning, Johnson Bank works with the client’s estate planning attorney to structure trusts, administer them and distribute assets to the family. The bank is also involved in business succession planning. This service is important, even for customers whose immediate goal is simply to run their business.

“What if you get hit by a bus tomorrow?” Cornelius says. “What will happen to your business? What will happen to your family?”

The bank helps pass the business to family members, employees or outside parties.

Johnson Bank also offers investment services that allocate assets and tailor a customer’s portfolio to their risk tolerance and their goals and objectives.

Bank of America and Wells Fargo Bank are typical of other commercial banks that offer private banking through separate divisions. Bank of America provides private banking through U.S. Trust, Bank of America Private Wealth Management in Phoenix, and Wells Fargo’s private bank operations are in Scottsdale. Bank of America clients must have at least $3 million in investable assets or $5 million in net worth. Wells Fargo clients must have $1 million in liquid, investable assets or in loans and deposits.

Those banks and Johnson Bank offer similar services via a team of financial experts. The bottom line is helping clients grow, manage, protect and transfer their wealth.

Private banking services at Bank of America and Wells Fargo are too numerous to list in their entirety. However, the following are highlights of their services beyond basic banking:
• Credit services. Capital is available for borrowing needs that are part of a wealth-management plan.
• Real estate management. Real estate often is a client’s most significant asset. Expertise on high-dollar transactions and mortgage financing is available.
• Asset allocation and investment strategies. Asset allocation helps clients avoid overly investing in one asset category. To minimize the impact of a declining stock market, customers are introduced to alternative investments, such as hedge funds and private equity. Clients are advised on concentrated stock positions.

“The client worked for General Electric for 30 years, retired and has a concentration of GE stock,” explains Steve Tufts, Wells Fargo’s regional manger of private banking. “We help them understand the pros and cons of having that concentration and how to reduce the risks.” Brokerage services also are available.
• Risk management. Financial experts help minimize exposure to interest rate and foreign exchange uncertainty.
• Retirement planning. “This means making sure the client has had substantial thought on how to position themselves for retirement,” says Chris Kelly, head of Bank of America’s private banking in the Valley. “What kind of lifestyle do they want in retirement and work backward from there.”
• Wealth management and protection. Working with clients’ attorneys and accountants for estate planning and trust set-up. Also, administration is a key element of wealth management and protection. Often, the bank becomes the client’s estate trustee.
• Wealth transfer. Tax efficiency is an overriding concern for private bankers, and it is particularly important when advising clients on transferring business ownership and wealth transfer to heirs and charities. Customers can lose a lot of money if a business ownership transfer is not properly planned, Tufts notes. Private banking helps customers establish philanthropic goals and roll them out via charitable trusts and foundations to establish the family’s legacy. Private bankers have the expertise to work closely with multigenerational families.

An offshoot of private banking services is a good night’s sleep.

“We seek to provide clients with peace of mind,” Kelly says. “They know they are in good shape. They know they have a good strategy in place.”

www.johnsonbank.com
www.bankofamerica.com/ustrust
www.wellsfargo.com/theprivatebank