Global Private Banking

Abstract Private banking caters to wealthy individuals who, like other investors, base asset-allocation choices on their relative preferences for risk and return. There is value in diversification across individual assets, asset classes, political-economic environments, and other asset allocation categories. The lower the correlations across asset buckets, the greater the power of diversification. Like everyone else, wealthy people are explicitly or implicitly looking for “efficient” portfolios that minimize risk for a given target rate of return or maximize total returns for a given level of portfolio risk. They are different from nonwealthy people in that they have a lot to preserve, so that they often tend toward relatively conservative asset-allocation approaches. They are also sensitive to confidentiality, trust, and service quality.