Notes from a Private Bank Dinner: Interesting Insights on Spending Across Wealth T tiers
A recent dinner in Geneva, hosted by a private banking executive, brought together about 30 attendees. It was a brand-partner event rather than a straight sales push for private banking, but the discussions shed light on how spending and service needs evolve at different levels of net worth. Below are summarized notes from the conversation, with my own reflections in brackets.
Entry level for private banking: around 20–25 million
– Pre-covid threshold rose from roughly 10 million, reflecting asset value growth.
– Spending patterns show a shift toward simpler, tax-managed portfolios. US clients emphasize tax-loss harvesting; EU clients prioritize tax-efficient structuring.
– Typical portfolio mix (rough estimates):
– Real estate: 25% (roughly 8–10 million of gross real estate value before mortgage; about 5 million in equity after accounting for mortgage)
– Equities: 40%
– Private markets / alternatives: 20%
– Fixed income / cash: 15%
Notably, real estate constitutes a substantial share across this tier.
– Clients in this bracket often seek portfolio lending and liquidity access to diversify away from large, appreciated stock positions or concentrated private holdings.
– Demographics: ~40 years old, married with 1–2 children. Annual spending around 1 million.
Around 40–50 million
– Referred to as the “consumption expansion” tier. Typical clients are mid-career and show strong appetite for borrowing against concentrated equity, carry, or GP stakes to fund lifestyle needs.
– Portfolio mix roughly:
– Real estate: 30% (about 15–20 million gross value; 8–12 million in equity after mortgage)
– Equities: 30%
– Private markets / alternatives: 30% (illiquid holdings such as private company stakes are included)
– Fixed income / cash: 10%
– Spending grows significantly in this range due to expanded household staff, charitable commitments, and travel. There is a pronounced emphasis on trusts and estate planning.
– Typical age: 45–50. Annual spending: about 1.5–2 million.
60–70 million
– Described as experiencing “the rise of non-linear expenditure.” Examples include moving from commercial travel to fractional or home-based arrangements, larger travel budgets, and multi-room accommodations.
– Portfolio growth leans toward illiquid assets (private company stakes, GP stakes, carry) with a goal of diversification away from core holdings and toward uncorrelated assets. Long-dated commitments to various funds can align with shorter-term financing needs.
– Financing considerations often center on acquiring trophy family real estate (primary property around 15–20 million; secondary property 7–10 million) and managing multi-period charitable giving.
– Typical age: 45–55. Annual spending: about 3 million.
90–100 million
– Often the result of non-recurring liquidity events that lifted individuals from 30–40 million to 80–100 million.
– A clear signal of inflation in trophy assets and experiences; this segment has grown notably since 2019.
– Portfolio characteristics:
– Illiquid assets: 20–30%
– Real estate: 25–30% (primary residence around 15–20 million; secondary residences totaling 20–30 million with mortgages)
– The remaining allocation across equities and cash
– Collectibles, art, and similar assets begin to hold material value (roughly 1–5 million)
– Annual spending: around 4–5 million.
Thoughts and reflections
– The data highlights a pattern I didn’t fully expect: real estate plays a larger, steadier role across multiple levels than I anticipated.
– The evolution from liquidity-driven needs (cash and lines of credit) toward sophisticated illiquid allocations (private equity, GP stakes, carry) becomes more pronounced at higher wealth levels.
– Tax efficiency and estate planning remain central as net worth increases, along with expanded charitable commitments and family governance considerations.
Food for thought
– These private-bank insights offer a useful contrast to common public narratives around “Fatfire” spending. Real-world spending profiles and portfolio allocations appear more nuanced and tiered than a single archetype might suggest.
