Private banking is a prestigious service offered by banks to clients of substantial net worth.
Private banking replaces the traditional bank branch system with a single individual: your dedicated private banker. They will be your main contact for everything from paying a bill to specialized credit solutions.
Private banking offers at major Canadian banks are very similar. Although it is offered at high fees, private banking can be worth it if your financial situation is very complex.
Within the private banking offer, Canadian private bankers usually deal with three tranches of clients:
- Regular high-net-worth individuals, up to a $5M net worth
- Very high-net-worth, between $5M and $30M net worth
- Ultra high-net-worth, above $30M net worth
How Much Money do you need for Private Banking in Canada?
Minimums for private banking can vary across institutions and exceptions can be made for high-potential clients in some cases.
Generally, private banking is offered to clients who have a net worth of at least $3 million dollars and/or $1 million dollars in liquid assets. Within Canada, TD specifically advertises that it accepts private banking clients with only $750,000 in investments with them.
Clients with sophisticated financial situations and extensive credit needs are key prospects for private bankers.
In Canada, most private bankers are mutual fund licensed. Despite this, private bankers tend to refer investment businesses out to advisors that are within their network and focus solely on credit and relationship management.
We’ll cover the best private banking in Canada below, as well as if it’s worth the fees that it costs.
Best Private Banking in Canada
Private banking in Canada is usually offered by the big five banks. These include:
- RBC
- CIBC
- BMO
- TD
- Scotiabank
1. RBC Private Banking
RBC offers private banking for individuals with a minimum of $1 million dollars in investable assets or $3 million dollars in net worth.
RBC’s private banking offers cash management, credit and lending, as well as cross-border banking.
RBC also has a wide offering on the financial planning side, whether through your dedicated private banker or an advisor in their network.
2. CIBC Private Banking
CIBC’s private banking website does not outline its offer’s minimum requirements, although they can be expected to be fairly in line with RBC’s.
CIBC’s offer includes cash management, investments, credit and lending, and wealth planning.
Most of the offerings mention introductions to specific individuals outside of the private banker, such as estate planning specialists for insurance (under financial planning).
3. BMO Private Banking
BMO’s private banking online resources are connected to their private wealth page. BMO does not outline any minimum requirements for private banking, but they are likely similar to RBC’s.
In terms of services offered, BMO’s private banking offer is likely almost identical to CIBC’s and RBC’s.
BMO outlines that its private banking has won numerous awards, including the best private bank in Canada for 2020 and the best private bank between 2011 and 2022 from World Finance Banking Awards.
4. TD Private Banking
TD’s private banking outlines that the bank offers its services to individuals with over $750,000 in investable assets (with TD). This is significantly lower than TD’s bank peers.
TD private banking focuses on liquidity, deposit solutions, payment solutions, and services for business owners.
TD’s private banking branches out into investment management, estate planning, and wealth planning, likely on a referral basis.
5. Scotiabank Private Banking
Scotiabank’s private banking offers similar features to the other bank. A few differentiators include 10,000 Scene+ points when signing up, as well as access to Scotiabank Pursuits, a concierge and travel management service.
Scotiabank’s Total Wealth Credit Solution references inputs from tax and investment advisors.
Scotiabank has also won the best private bank in Canada award from Global Finance, as well as the best private bank globally for a net worth between $1 million and $24.9 million.
Is it Worth it?
Private banking is most valuable for clients with complex financial affairs or for those that are looking for a dedicated banker to work with.
Private banking fees are usually around $100 a month with most banks, although this number can be higher. Fees may be reduced or waived based on investments committed with the bank.
An intermediate banking offer called premier banking may be available for clients who do not qualify for private banking. Premier banking has minimum requirements for qualification, is less expensive, and usually comes with fewer features.
Private banking may allow you to access lower credit rates. Your private banker can work closely with you to make your short-term and long-term finances more tax efficient. In some cases, private bankers are highly qualified financial planners.
A final benefit to private banking is the prestige that the service offers. You no longer have to visit your local bank branch to complete your banking. You will also be given access to fancy bank cards which you can use in your day-to-day shopping.
What is the Most Prestigious Bank in Canada?
Although all of the five major banks in Canada offer virtually the same services and rates, one bank does stand out. Royal Bank of Canada (RBC) is the largest out of the five based on market capitalization.
Royal Bank of Canada leads across several metrics, including its number of banking clients, its number of branches across Canada, and its number of employees.
Given its leadership position across these metrics, RBC can be considered the most prestigious bank in Canada.
Which Bank has the Best Private Banking?
The quality of service you will receive from private banking is largely dependent on your assigned private banker.
Private bankers can have widely different backgrounds, although they are all likely well-versed in the credit arena. Some may be able to help with financial planning and tax strategies.
Determining which bank has the best private banking is an afterthought. You should first consider which bank you use the most, as well as what additional services outside of private banking you are looking for.
Banks are able to stand out more with other aspects of their business, such as wealth management or planning. This is because these services typically involve more complexities than just credit and lending.
The decision around which private bank to use should be made around other services that you are looking to access as well as which bank you have been using until now.
If you are still looking to determine which bank has the best private banking, both Scotiabank and BMO advertise that they have won numerous awards on their websites.
Evaluating your Private Banker
As we have mentioned before, some private bankers can be well-versed in financial planning or taxation. Your private banker will likely provide you with a short biography sheet outlining their previous work and experience.
If you are looking for a quality private banker, make sure that yours exhibits some of the following:
- Has earned a few financial or investment industry designations
- Is a part of a sizable team
- They are readily accessible to help with your banking and credit needs
A private banker with a large team is likely one that has been around for a while. More junior private bankers tend to work with high-net-worth clients as opposed to very high-net-worth and ultra-high-net-worth clients.
Newer private bankers will also either be on a team by themselves or with one or two associates.
Conclusion
The private banking shelf in Canada is fairly homogenous. With competition so fierce across the major banks, the main differentiating factor within private banking will likely come from your dedicated private banker’s skill set.
In order to qualify for private banking, you will have to meet stringent requirements in terms of net worth or liquid assets. For those close to the threshold, TD’s private banking offers one of the lowest minimums in terms of invested assets with the bank.
If you have a complex financial situation and value having a dedicated relationship manager to work with on your banking and credit needs, private banking may be of great value to you.
Be mindful that the fees can add up over time. If you have not yet made a decision around which bank to work with (more generally), make sure to do some research to learn more about each institution’s features.
