A private banker is your contact at a bank’s private banking unit, and their job is the whole relationship with the bank: deposits, mortgages, credit lines against your portfolio, trust services, and investments through the bank’s own advisory arm. The bank earns on each of those. A fee-only advisor can’t lend you money or hold your deposits, but is paid only by you and owes you a fiduciary duty for the whole relationship: a median 1% of assets a year, or $4,500 a year for flat ongoing planning, among firms that publish prices. So the choice turns on whether you need the bank’s balance sheet or an advisor with nothing else to sell.
The short version
| Private banker | Fee-only advisor | |
|---|---|---|
| What they coordinate | Banking, lending, trust and investments at one bank | Your plan and investments, across any bank and custodian |
| Lending | Yes: mortgages, credit lines, loans against your portfolio | No; they can help you compare loan offers |
| Acting as trustee | The bank or its trust company can serve | Usually not; they can work alongside a trustee |
| How the firm earns | Investment fees, trust fees, loan interest, deposit margins | Only the fee you pay |
| Duty | Varies by product: fiduciary as trustee or adviser; a loan is a bank product | Fiduciary for the whole relationship |
| Minimum | Usually in the millions, rarely published | 50% of fee-only firms that state a minimum say they have none |
| Published prices | Rarely | Many publish them; this is where our medians come from |
What a private bank does well
Lending. This is the clearest thing a bank offers that an advisor can’t. A private bank can write a large mortgage, extend a credit line against your portfolio so you don’t sell, or bridge a home purchase. FINRA’s investor note on securities-backed lines of credit explains the trade-off: you borrow without selling, but if your portfolio falls “the firm can sell your securities” to cover the loan, often “without giving you any notice.” It also notes the person who recommends one “might be paid based on a portion of the fees generated.”
Trust and estate administration. A bank or its trust company can act as trustee, pay bills, file trust returns and handle distributions for decades. Some trust officers hold the CTFA, a trust credential from the American Bankers Association. If your estate plan needs a professional trustee, that’s a real reason to have a bank relationship.
One place for everything. Checking, cash management, credit cards and investments under one relationship manager.
What a fee-only advisor does well
Advice with no product attached. A fee-only advisor earns the same whatever you buy, borrow or deposit, so they can tell you the bank’s loan is a good deal, or that you’d do better elsewhere.
An open menu. They can use any low-cost fund at any qualified custodian, not one bank’s platform.
Planning across institutions. Your accounts may sit at three firms and your trust at a fourth. A fee-only planner looks at all of it, including taxes and the estate documents your attorney drafts. See estate planning and family wealth transfer advisors in the public graph.
What each costs
A private bank’s price is spread across products. You may pay a percentage for investment management, a separate trust fee, interest on loans, and you earn whatever the bank pays on deposits. Private banks rarely publish these schedules; ask for each one in writing. If the bank’s investment arm is a registered adviser, its brochure, Form ADV Part 2A, has to give the fee schedule in Item 5. Cash held as deposits is FDIC insured up to the limits; investments bought through the bank are not, as the FDIC notes, “even those offered by FDIC-insured banks.”
A fee-only advisor’s price is one number. At larger balances, most firms lower the percentage in tiers, and a flat fee doesn’t grow with the balance at all:
The tiered schedule is an example, not a published median; firms set their own breakpoints, and the flat fee may not include running your portfolio. For 10- and 20-year totals, see our guides to $3 million and $5 million.
When a private banker is the better choice
- You need to borrow, especially large or unusual loans secured by your portfolio, a business or property.
- You need a professional trustee for a trust that will outlast you.
- You want one relationship for daily banking and cash management, and you’ll check the investment pricing separately.
When a fee-only advisor is the better choice
- You want advice from someone with nothing else to sell. No loan, no deposit margin, no in-house fund.
- Your money sits in several places, and you want one plan across all of it.
- You want a price you can compare. Many fee-only firms publish theirs. Browse ultra-high-net-worth advisors and multi-generational family advisors.
Many households use both: the bank for lending, deposits and trust administration, a fee-only advisor for the plan and the investments. Put each role in writing so you don’t pay two firms to manage the same money.
How to check which one you’re talking to
- Find out which entity is advising you. Banks are left out of the federal definition of an investment adviser, so investment management at a private bank runs either through a registered advisory affiliate or through the bank itself, often its trust department. If it’s an affiliate, look it up on the SEC’s adviser search. If it’s the bank, there may be no Form ADV to read, so ask for the investment agreement and fee schedule.
- Read the affiliate’s Form CRS. Item 2 has to state any account minimum, and Item 3 has to cover the firm’s own products and payments from third parties.
- Check related companies. Form ADV Part 2A, Item 10.C lists related banks, broker-dealers and insurers. A fee-only advisor’s should show none that pay it.
- Ask the private banker: “What does the bank earn from me in total each year, across investments, trusts, loans and deposits?”
For the broader comparison, see financial planner vs wealth manager, family office vs wealth manager and independent advisor vs bank advisor. Our guide to telling whether an advisor is fee-only shows where to look in the filings.