As with the rest of the banking world, private banking has been sliced and diced in an effort to understand what model will work best in the future. The back-to-basic mantra has re-evaluated the simplicity of lending on the back of deposits for wholesale banks, and has opened up a debate on a traditional alternative to the business of investment banking, which would bring it back to advisory and brokerage activities.
So what about private banking? Some issues, such as reduced revenues and heavy cost bases, are shared across most of the banking spectrum. Others are more specific to private banks due to the emotional nature of this business. The trust in wealth managers' investment acumen has been broken and clients' appetite for more profitable but riskier assets is close to zero.
