Private Banking vs Investment Banking | Tabular Representation Guide


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Many students instinctively think of Investment Banking when they hear “banking.” They also often conjure up images of glitzy blockbusters like The Wolf of Wall Street or Wall Street. In truth, banking offers various divisions and responsibilities for brilliant graduates to pursue, each requiring different skills. Thus, we have made this post on private banking vs investment banking to aid you.

What is the Definition of Private Banking?

Private Banking vs Investment Banking

Private banking is a thorough wealth management service for high-net-worth clients. A banker may have just 20 to 30 customers and give a highly personalized financial planning service frequently done daily. Professionals compare it to working as a general practitioner.

A banker will listen to a client’s financial concerns, just as a doctor does with a patient’s health. Although the GP may not know the appropriate course of action, they will refer the patient to a specialist.

Similarly, the private banker will collaborate with experts to give investment ideas, tax-efficient solutions, cross-border transactions, and succession planning.

Advantages of Private Banking

Private Banking vs Investment Banking

Banks pursue the ultra-wealthy because it generates high returns and ensures a steady customer revenue stream. Private banking customers profit in the following ways:


Customer dealings/transactions and services provided to HNWIs are usually kept private. Banks provide unique goods to their private banking customers that they keep secret to prevent rivals from selling comparable items to the same clientele.

The culture of secrecy in private banking appeals to high-net-worth people because it allows them to hide personal details that, if made public, may give their business competitors an unfair edge.

They could also want to keep their monetary operations as quiet as possible. HNWIs are sometimes the targets of litigation regarding their assets. They feel more secure knowing that such information is kept private.

Services at a Discount

As a return for the enormous amount of business they bring to the bank, a bank may provide HNWIs reduced services. Prominent private banking services that may get given at a discount include tax preparation, corporate checks, and estate administration.

Clients in the export and import industries may benefit from favorable foreign currency rates. HNWIs that invest in real estate benefit from the lead advisors in charge of their accounts completing their transactions quickly and efficiently.

Exceptional Investment Returns

Banks often assign their highest-performing employees to their private banking segment to oversee HNWI accounts. Clients often get greater investment returns as a result of this technique.

The average rate of return on private banking investments is between 7% and 13%, with up to 30% being possible on rare occasions.

It is achievable because wealthy customers have unique access to investment instruments owing to their vast finances. Through their relationship with the bank, top-performing hedge funds get included. The customer also receives expert advice on the best investment alternatives with a high rate of return from an experienced investment specialist.

What is the Definition of Investment Banking?

Private Banking vs Investment Banking

Investment banking is a form of financing given by a finance business or a banking unit to major multinational organizations. This entails assisting them with their investment strategies.

This service helps affluent people, governments, and significant firms and organizations generate or produce money. An investment bank’s essential responsibilities include underwriting new securities for various businesses and assisting in selling securities.

You’ll also be in charge of mergers, purchases, and restructurings.

Large-scale organizations, enterprises, and governments use investment banks to make massive financial transactions. This is in addition to getting help with critical financial decisions.

To do this, investment banks often aid companies with their IPOs (Initial Public Offerings). Furthermore, these investment firms will sell the firm’s shares on the corporation’s behalf on the open market.

In a nutshell, investment banks act as financial advisors to large firms, organizations, and governments. These advisors help firms with sales and trade among buyers and sellers. This is in addition to assisting them with critical financial deals such as M&A transactions.

Companies often seek professional assistance to assess which investments will be beneficial in the long run and which may result in future losses.

This guy is an expert in investing who understands the feasibility of large projects. This person gets referred to as an investment banker. Before allowing a client to consider support, the investment banker will evaluate and notify them of the project’s dangers. This helps the client to save time and money in the long run.

What is the Process of Investment Banking?

Investment banks provide investment banking services by acting as middlemen between companies and investors. It mainly deals with stock exchanges and shares.

The investment banking profession aids significant firms and organizations develop and executing a successful investment plans. This necessitates the accurate pricing of financial instruments. An investment bank acquires most of the shares on behalf of a company in an IPO (Initial Public Offering).

The investment bank sells these shares on the market, which acts as a proxy for the firm. Investment bank boosts the company’s revenue while also adhering to all legal requirements.

The investment bank usually gains by marking up the initial price of shares. This is valid when selling them to investors. This is in addition to supporting the corporation in generating the maximum profit feasible from this activity.

If the stock gets sold at a cheaper rate, the investment bank may lose money. If a market circumstance arises in which the stock becomes expensive, this is true.

Before enlisting the help of an investment banker, a company should assess its needs and weigh all of its options. Before approaching an investment bank, the company must consider several essential factors.

These factors include the quantity of money getting raised and market competition. Once the organization has a firm grasp on these issues, it may employ the help of an investment banker to locate new businesses to finance.

Investment Banking’s Advantages

As previously said, investment banking assists major organizations in making critical financial choices in various ways. This is on top of ensuring that they make the most money possible.

This is why investment banks get a preferred financial institution among businesses and governments alike. We can say that investment banking and investment banks provide many advantages that influential organizations and companies may use. The following are some of the benefits of using an investment bank:

  • Investment banks treat their customers with care and provide them with the required risk information. This is on top of the advantages of investing in other businesses or organizations.
  • These banks serve as a link between the business and the investor. As a result, they ensure a rise in financial capital by aiding in significant financial transactions such as acquisitions or mergers.
  • It conducts a comprehensive examination of the agreement and project that its customer is about to embark on to protect the client’s money. This will aid in reducing the risks associated with the transaction or project in question.

Private Banking vs. Investment Banking: Tabular Representation

The table below will further aid you in the differences between private and investment banking.

Private banking  Investment banking
Private banking is a thorough wealth management service for high-net-worth clients.Investment banking is a form of financing given by a finance business or a banking unit to major multinational organizations. This entails assisting them with their investment strategies.
Customer dealings/transactions and services provided to HNWIs are usually kept private.This is impossible with investment banking.
This happens occasionally in private banking.It always conducts a comprehensive examination of the agreement and project that its customer is about to embark on to protect the client’s money.
As a return for the enormous amount of business customers bring to the bank, a bank may provide HNWI reduced services.This is absent in investment banking.

Frequently Asked Questions

Is there a distinction between private banking and investment banking?

Yes. The above tips on private vs. investment banking will aid you immensely here.

What does a typical day in the life of a private banker look like?

Your position, location, company type, client emphasis, and seniority all impact your daily life.

A regular day in the life of a junior Relationship Manager would look like this:

Morning (8:30 a.m. – 12:30 p.m.): Evaluate client accounts, profitability, and market activity with your senior RM and a few Investment Professionals. You scour corporate websites and Twitter for fresh prospects, issue some push emails, and make a few cold calls after the meeting.

Lunch (12:00 – 1:30 p.m.): Meet with one of your group’s MDs to talk about long-term career plans and the PB business 

Afternoon (1:30 – 5:00 p.m.): You attend a series of meetings with clients with your senior RM and annotate each client’s objectives, key life/business developments, etc. You sometimes provide facts and data on investment, estate, and tax goods.

Closing (5:30 – 6:30 p.m.): With your senior RM, you evaluate the day’s actions, plan the remainder of the week, and follow up with a few prospects you contacted the week before.

What does an investment banker’s typical day entail?

A regular day for an investment banker would look like this:

Morning: Meet with the RMs to go through various investment accounts and give them an update on your most recent suggestions. After that, you run some progress reports for different customers to compare them to the marketplace and their stated objectives.

Afternoon: Conduct research on alternative asset allocations for a few customers who have requested them, and estimate their returns using these new combinations. You also suggested assignments for a few prospects that the RMs had just approached.

Finally, meet with the rest of your team to review market happenings this week, new goods that may interest customers and overall success over the previous quarter.

What makes a job in private banking so appealing?

Unlike Investment Banking, which focuses on transactions, Private Banking focuses on building relationships. To understand your client’s demands, you must build excellent business ties.

You’ll also need to learn how to collaborate with top accountants, attorneys, and financial consultants who will provide you with expert assistance. It’s a terrific combination of problem-solving using your intelligence and analytical abilities and conveying ideas to customers.


In conclusion, private banking and investment banking come with various merits. And if you need more help here, the above highlight on private banking vs. investment banking will aid you immensely.

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