"What’s our plan for the next quarter? Do we have any promotions?"

This is how—or something similar—every quarterly conversation starts between a banker and a manager returning from a bank leadership meeting. A bank is a standard commercial company, whose business goal is, of course, profit. Your private advisor is not a Samaritan paid by a charitable foundation either—they also operate for profit. So what’s the difference between making an investment at a bank or through a private advisor? And is there even a difference if they often choose from the same or similar options? There is! A big one! But let’s take it step by step, from A.

Every major bank has, among other things, its own investment company within its group, and within this family of products/funds, clients can invest and grow their money. Even though these are reputable companies with quality products/funds, every one of these companies has its “black sheep”—a fund they are not particularly proud of and would rather not include in their offering.

A general disadvantage of investing through a bank is the limited selection of funds from which a banker can choose, because they can only select from the “family” of funds. You might be thinking, “But what about my few hundred thousand…?” Even your few hundred thousand deserve proper attention. Or did you find them in the pocket of your winter coat when you sent it to the cleaners in spring? Another challenge for banks is banker turnover. In some financial institutions, it is “significantly noticeable,” which affects the knowledge and experience of bank employees. Just like with a good car engine, “volume cannot be replaced,” knowledge and experience come only with years of investment practice.

With all due respect to bankers—the author of these lines has trained bankers in a bank for almost ten years—even if you sit across from not only a smart, young, dynamic banking professional but also an experienced and knowledgeable one, unfortunately, you haven’t won yet. Why? Partly due to regulations, where the banker is only in the role of an investment intermediary and doesn’t have the full financial tools to polish a fund the way a private advisor would.

Of course, a banker is a banker, but to generalize, the main difference between a banker and a private advisor is the time horizon of working with the client. An advisor cares about the results of their advice in one year, three years, ten years, or more. A banker tends to focus on the month, quarter, or year. Bankers often offer specific funds and ready-made solutions that best meet quarterly targets and sometimes are “on promotion,” occasionally thinking on behalf of the client. A private advisor, by contrast, first asks, listens to your plans and ideas, and only then provides advice.

In summary: A banker relies on the bank’s size, brand, and analytical resources. Selling investment products is part of their job.

A private advisor, on the other hand, helps you plan and clarify your goals and strategy, soothes emotions in uncertain times, and, importantly, educates you along the way.

Call or write to me and experience the difference yourself. I sleep at night, but during the day I take calls or call back.