Small Private Bank experience for NWI over 500K

[CostcoFanofThree]

does anyone on mn have experience of using small private banks such as Arbuthnot Latham, Weatherbys Private Bank, or Hampden&Co.
maybe Barclays or Lloyd's one time large lump sum and financial advice.
single mom of 2 who has no financial background, needing a handhold with sheltering and investing.

Their website says for new clients it’s a minimum of £750k.

yes I agree - having an initial chat will help her understand the options.

Having £500k in cash for a short period of time isn’t necessarily a bad thing while coming up with a plan. Keeping it in cash is likely a waste due to the corrosive effect of inflation.

Focus on financial planning services (as offered by say RBC Brewin) and to discuss how to structure this across wrappers (pensions, ISAs) for current and future income needs in a tax-efficient way, and if there is a tolerance towards some market linked investments which offer some diversification. Would also consider wealth transfer to kids etc.

@Retiringplans i switched from a managed portfolio to a self invested platform and i highly doubt she wants that level of responsibility.
From what she said and asked wants a safe spot, good interest and tax sheltering as appropriate.
She works about 1 day a month, not sure if she plans to do more/something different. So I assume she might like some monthly income.

Personal banking is free in the UK. But if she wants to maintain protection, she could just deposit all the money in NS&I. No need to pay a private bank, which may not want her custom anyway and probably don't offer higher rates than the best instant access from standard providers.

This is why NS&I might suit her. You get a single screen ‘dashboard’ to see your products. Income bonds can be set up to pay directly into her current account monthly.

She’ll have to check her interest and declare it to HMRC annually though via self-assessment.

You can deposit with multiple banks through Hargreaves Lansdown, it’s super easy. Their app is really nice to use. I have 4 savings accounts with them currently actually.

An IFA (also regulated) can access the whole market

Just make sure, if this bothers her, that it is indeed an independent advisor. Even outside the banks some financial advisors are restricted and can only advise on products from certain providers. It should be much more obvious nowadays but worth checking if that is of importance (it’s not to everyone).

I was going to say this. five savings accounts with separate protection. All in one place. No fees, no bank cards or anything.
Not the best idea long term in terms of returns but a starting place definitely.

She currently banks with HSBC

If it's just a fixed interest cash account it's very simple, normally no card, no app, no fees. She will if she gets over 10,000 in savings interest a year need to fill in one tax return to HMRC regardless of how many accounts she has but it's pretty straightforward. Basically just fill in the box with how much interest she's earned in that tax year for all accounts so if she has 5 accounts add them together and that's it.
Under 5 years it's recommended to keep in cash rather than invest.

She could do the funds within those platforms that are based on risk levels eg ajb do a balanced - some even do ones now that are focused 9n dividends if that's what suits.
I would definitely direct her to unbiased.co.uk in the first instance - the site asks questions to find the best match & you can specify if you want all of market

Why five fees?

she could invest in fixed rate bonds etc with different places, no fee, just normal places

five accounts sounds esier than a lot of what you’re saying tbh

I think you’ve confused everything by talking about net worth, it’s just someone looking to invest a lump sum

@OrangeFlower14 in Canada where I’m from banks charge monthly fees on all but children’s accounts. My family who is asking my support in this is in the UK I didn’t know that in the UK there are no charges for personal accounts. I switched to self investing in part due to the monthly fees. So my banking experience is obviously very different.

Going back to your original question.
Your relative isn’t really a HNWI which is why we don’t think private banks are the best idea. The fees probably won’t be worth it.
You also talk about banks vetting their financial planners. Independent financial advisors in the UK should be members of a professional body and if so are highly regulated.
Also a bank may only provide advice on their own products rather than whole of market.
If the money is for long term investment rather than using savings accounts short term, she needs to find a good, regulated IFA, it doesn’t sound as if she will feel confident self investing so paying for an IFAs fees rather than a private bank seems to make the most sense.

As pp have said, it'd be looking at NS&I. £50k in premium bonds, and the rest in one of their guaranteed bonds. Growth or income, that's the choice. Remember that anything over £1k a year counts towards your taxable income. (depending on marginal tax rate)

But would wanting 1.5K per month as income be difficult to set up?

She could get around that at CURRENT percentage easy access savings accounts but that would be pre tax.
If this is a long term plan she really does need an IFA.
This is what they do.
They would need to know, her age, her current income, her current pension provision, her housing situation etc etc
Instead of a small private bank who won’t really be interested, she needs a qualified IFA

Point her towards Jackson Wealth. They're the firm owned by the guy that runs Meaningful Money. I've found them excellent. Very sensible advice that doesn't complicate things necessarily.

She can listen to their podcasts and watch their YouTube to get a feel for the people behind it.

£1.5k a month as income is currently really easy to get - on cash savings if in fixed term bonds with NS&I or split between 4 or 5 providers like this one here (£120k) max https://chartersavingsbank.co.uk/Products/FixedRateBond she would get around £24,000 a year interest. If she's a SAHM with no other income then she will get a tax free allowance of £12,570 then on top of that she would get an extra £5,000 tax free (only if other income excl savings interest is below £17,570) and then there's £1,000 tax free allowance so £18,570 is free of tax. You can also put £20000 a year in a cash ISA which isn't taxed so another £1000 in interest untaxed - next April allowance goes down to £12,000 for cash ISAs. She would need to keep £20k or so per year in an easy instant access account, rest could be fixed for say 1 year and at end of year she needs to check what are best rates and move. So of the £24,000 earnt that way if she has no earnings then her tax bill would be around £900 a year so she would keep around £23,100 a year in interest at current rates for best buys. If she is subject to tax in Canada as well check their tax rules. Cash savings accounts which do not have cards here never charge, current accounts normally only charge if there are services included like insurance, there's normally no interest on a current account but has a card and can pay bills. Sometimes they have cash back. Moneysavingexpert and its forum is great for free basic financial advice.

If she will be having the money for longer than 5 years then its worth looking at investing but only if she won't need access within 5 years.

@OneZanyCat she previously didn't need to file taxes in canada and has no fixed address here.
i have several what we call GIC's that pay out at the end of longer terms.
all this info is really helpful and appreciated.

Chartered IFA.

Not a private bank they are usually tied agents and frankly not interested in 500k

If she's a SAHM with no other income then she will get a tax free allowance of £12,570 then on top of that she would get an extra £5,000 tax free (only if other income excl savings interest is below £17,570) and then there's £1,000 tax free allowance so £18,570 is free of tax

How do you get the £5k and £1k extra allowances - I certainly don't!

If you have no income,your tax free savings allowance is effectively that amount. Not sure of the details or if you have to apply for it, but it is true.

All basic rate tax payers get a £1k allowance for savings interest, £500 if you pay higher rate. The £5k is the maximum allowable as the "starting rate for tax", Google will explain, but it basically increases your personal allowance if you have a very low income.