cancel
Showing results for 
Search instead for 
Did you mean: 

Value of becoming a "Private Client" with a bank?

Highlighted
Established Member

Value of becoming a "Private Client" with a bank?

Good morning everyone,

 

After learning about the possibility of reasonably becoming a private client with a bank (Merill Edge and Chase Bank), I started to wonder if there was any real value to pursuing that avenue.

 

This would be from the perspective of gaming the benefits of the private relationship without incurring the extra expenses (taking worse loan rates, using actively managed funds, etc). Does this make sense compared to just building relationships with local credit unions who may offer good rates? I currently bank with a local CU, Alliant CU, and Discover bank to see which I like better, but have been looking into Chase Bank and BOA more as I dip my toes into their respective credit cards. This is also considering that the liquit asset requirement would not be difficult to meet for either of these banks given retirement accounts combined with checking and savings.

 

Thank you for your time and answers,

RG








Updated 8/8/20
Message 1 of 9
8 REPLIES 8
Highlighted
Community Leader
Super Contributor

Re: Value of becoming a "Private Client" with a bank?

I guess the first question would be what other benefits from a private client arrangement would you be interested in leveraging that you wouldn't get from a credit union?

 

Since you mention Merrill Edge and Chase in the same sentence I'll point out that Merrill Edge is at its heart a self-directed program (although if you're a large enough client the local Merrill agents and CFPs will go out of their way to make sure you know who they are) whereas Chase CPC is more like Merrill Guided Investing and Wealth Management programs as all 3 are geared toward provding managed investment services.



(7/2020)
FICO 8 (EX) 798 (TU) 800 (EQ) 793
FICO 9 (EX) 817 (TU) 815 (EQ) 812

$1M+ club

Artist formerly known as ColdFusion
Message 2 of 9
Highlighted
Established Member

Re: Value of becoming a "Private Client" with a bank?

I think that the primary reason that I am willing to shift away from my credit union is that they are outdated in many respects. They finally released an app to check daily balances last year, and that app is clunky and will many times result in me getting locked out of my account until I call the credit union (only open for calls weekdays 9-4:30pm).

 

The rates are good, but not stellar, and they could easily be beaten with a little work even by big banks. They offer very little retirement funds, which isn't a huge deal since I plan to park my cash and forget it for retirement, but not having Vanguard (even ETFs) isn't a great thing for me. I feel like I'd be better parking my cash somewhere where I have some more variety in what I can invest in, as I plan to primarily park my retirement in Vanguard funds, as I said before.

 

Lastly, another "benefit" is the member share at the end of the year, which is anywhere from $100-$250 in cash returned as profit sharing, if you will. I'd gladly trade that out for better retirement investment options, extra perks (varied, but seem neat), and extra bonuses (like BOAs extra credit card/interest boosters at $100,000). Please let me know if I am thinking correctly or mistaken in my line of thought.

 

Thank you








Updated 8/8/20
Message 3 of 9
Highlighted
Valued Contributor

Re: Value of becoming a "Private Client" with a bank?


@ForAnarchy wrote:

I think that the primary reason that I am willing to shift away from my credit union is that they are outdated in many respects. They finally released an app to check daily balances last year, and that app is clunky and will many times result in me getting locked out of my account until I call the credit union (only open for calls weekdays 9-4:30pm).

 

The rates are good, but not stellar, and they could easily be beaten with a little work even by big banks. They offer very little retirement funds, which isn't a huge deal since I plan to park my cash and forget it for retirement, but not having Vanguard (even ETFs) isn't a great thing for me. I feel like I'd be better parking my cash somewhere where I have some more variety in what I can invest in, as I plan to primarily park my retirement in Vanguard funds, as I said before.

 

Lastly, another "benefit" is the member share at the end of the year, which is anywhere from $100-$250 in cash returned as profit sharing, if you will. I'd gladly trade that out for better retirement investment options, extra perks (varied, but seem neat), and extra bonuses (like BOAs extra credit card/interest boosters at $100,000). Please let me know if I am thinking correctly or mistaken in my line of thought.

 

Thank you


Unless you're looking to join the $5-10 million tiers at most brokerages (including ones like JPM), I don't really think you're going to see anything worth diverting funds to that you don't already find appealing. You can get access to free brokerages with access to stocks/ETFs with no minimum, so no bonus there. Most CUs already offer some form of free checking and ATM reimbursement, so nothing novel there either.

 

For those under the $5-10 million tiers, a brokerage like Fidelity is going to give you everything you need on the investment side, and for free at that. If you're dead-set on putting all of your money in one basket, then a CPC-type relationship might be worth pursuing, but otherwise I'd say put your everyday checking in a CU with good checking/ATM benefits, put your savings somewhere with decent interest, and put your investments in your favorite brokerage.

Message 4 of 9
Highlighted
Moderator Emeritus

Re: Value of becoming a "Private Client" with a bank?

Just to clear up something, CPC you can either go YouInvest (totally self-directed) or opt for the active management.  I am CPC and have zero intention of ever leveraging their active service unless I wind up with a LOT more money than anticipated.

 

It's totally up to you, talking BOFA for their platinum honors program and getting that default 2.625% spender isn't a bad deal, though AOD with 3% sort of blew that one up for anyone with a good credit score.

 

In my case I get some benefits like free wire transfers being CPC which I don't truly need but in todays world when I want to move money, I generally want to do it right now and I get that with CPC, which isn't something I can get at any credit union to my knowledge where transfers in general tend to be harder and almost certainly will pay for wires.  I probably got some additional benefits on the credit card applications I have done over time as I've gotten more auto-cli's than most and broken some community-found barriers with Chase UW but I don't know how much of that was tied to my using Chase for everything and having what for me and probably for many is non-trivial assets there.

 

The rest I don't know, it's helpful to do Chase CPC for example if you're living in an area where you will want a jumbo mortgage: they are competitive on jumbos and then you add the CPC discounts on top of it and it's really hard to beat their product.  Conventional though, even with CPC I can beat them without trying hard so it's less value there.  

 

I have yet to look at their auto loans, I suspect credit unions will be better.

 

If you are into non-trivial investing a better brokerage may be for you, but I can get everything I need out of Chase though I keep a rollover 401K at Fidelity as I really enjoy their news feed better than anything else I've found, but basic equities and options no problem with Chase YouInvest, but if you need/want bond access, go elsewhere.  Also if you want a margin account may need to be elsewhere too, YouInvest and I would guess Merrill Edge too likely suffices for maybe 98% of the retail investor space, but if you need more sophisticated trading you should be at a better brokerage.  One additional quirk is I get basically immediate transfers of deposits to my investment accounts, I can kind of do that with Vanguard and I suppose I could use Schwab and maybe Fidelity as my bank but it's a nice thing for me since I have run my financial life through Chase for almost a decade now.

 

The next line probably has far more aggressive discounts on origination, at the 10mm or so level that iced mentioned for Private Banking, but I suspect CPC benefits may continue to improve over time... certainly if Chase wants more of my financial business they could get it, things like better discounts on loan origination or compounding credit card rewards like what BOFA did would certainly be enough of a milkshake to bring all the mass affluent to Chase.

 




        
Message 5 of 9
Highlighted
Valued Contributor

Re: Value of becoming a "Private Client" with a bank?

I'm not CPC but I just did a jumbo with Chase. They saw my assets and when I inquired about whether it would make a difference on rates if I moved some over to become CPC they didn't sound very sure. 

 

I would be curious to know if anyone has received a points-free rate reduction on jumbo from them for simply being CPC, though. My guess is if there is, it's going to be pretty small, like .125%.

Message 6 of 9
Highlighted
Moderator Emeritus

Re: Value of becoming a "Private Client" with a bank?


@iced wrote:

I'm not CPC but I just did a jumbo with Chase. They saw my assets and when I inquired about whether it would make a difference on rates if I moved some over to become CPC they didn't sound very sure. 

 

I would be curious to know if anyone has received a points-free rate reduction on jumbo from them for simply being CPC, though. My guess is if there is, it's going to be pretty small, like .125%.


It's something that they check on with their backend team even when CPC which is why they probably couldn't state it as it probably depends on both relationship and timing.  

 

I can't speak to jumbo but I'd be surprised if it were that different, on a conventional it was $750 origination charge reduction and .125% rate reduction.  Conventional that's meh, jumbo, makes a competitive product even better.

 

That said I don't really know where I rate in the pantheon of Chase customers in terms of assets on file.  I'm probably top 5% just looking at published demographics and then dividing by some factor for major banks, but if I had 1m on file maybe it would've been different I don't honestly know and don't think you'd be able to know from the front line.

 

In your case I probably wouldn't have moved money over just for that TBH, in my case the discount at least makes me talk to them, but conventional their pricing isn't competive even with the discount.




        
Message 7 of 9
Highlighted
Valued Contributor

Re: Value of becoming a "Private Client" with a bank?


@Revelate wrote:

@iced wrote:

I'm not CPC but I just did a jumbo with Chase. They saw my assets and when I inquired about whether it would make a difference on rates if I moved some over to become CPC they didn't sound very sure. 

 

I would be curious to know if anyone has received a points-free rate reduction on jumbo from them for simply being CPC, though. My guess is if there is, it's going to be pretty small, like .125%.


It's something that they check on with their backend team even when CPC which is why they probably couldn't state it as it probably depends on both relationship and timing.  

 

I can't speak to jumbo but I'd be surprised if it were that different, on a conventional it was $750 origination charge reduction and .125% rate reduction.  Conventional that's meh, jumbo, makes a competitive product even better.

 

That said I don't really know where I rate in the pantheon of Chase customers in terms of assets on file.  I'm probably top 5% just looking at published demographics and then dividing by some factor for major banks, but if I had 1m on file maybe it would've been different I don't honestly know and don't think you'd be able to know from the front line.

 

In your case I probably wouldn't have moved money over just for that TBH, in my case the discount at least makes me talk to them, but conventional their pricing isn't competive even with the discount.


Another .125 would add up over the long term possibly, but not so much short term. I threw about $2200 for .125 rate drop and it'll take me around 3 to come out ahead on that. Given I'll probably only have the loan for 10 years, that's noticeable but not significant.

 

$750 is a rounding error and I would never notice it at closing. Amounts fluctuated by thousands day to day during the process.

Message 8 of 9
Highlighted
Moderator Emeritus

Re: Value of becoming a "Private Client" with a bank?


@iced wrote:

@Revelate wrote:

@iced wrote:

I'm not CPC but I just did a jumbo with Chase. They saw my assets and when I inquired about whether it would make a difference on rates if I moved some over to become CPC they didn't sound very sure. 

 

I would be curious to know if anyone has received a points-free rate reduction on jumbo from them for simply being CPC, though. My guess is if there is, it's going to be pretty small, like .125%.


It's something that they check on with their backend team even when CPC which is why they probably couldn't state it as it probably depends on both relationship and timing.  

 

I can't speak to jumbo but I'd be surprised if it were that different, on a conventional it was $750 origination charge reduction and .125% rate reduction.  Conventional that's meh, jumbo, makes a competitive product even better.

 

That said I don't really know where I rate in the pantheon of Chase customers in terms of assets on file.  I'm probably top 5% just looking at published demographics and then dividing by some factor for major banks, but if I had 1m on file maybe it would've been different I don't honestly know and don't think you'd be able to know from the front line.

 

In your case I probably wouldn't have moved money over just for that TBH, in my case the discount at least makes me talk to them, but conventional their pricing isn't competive even with the discount.


Another .125 would add up over the long term possibly, but not so much short term. I threw about $2200 for .125 rate drop and it'll take me around 3 to come out ahead on that. Given I'll probably only have the loan for 10 years, that's noticeable but not significant.

 

$750 is a rounding error and I would never notice it at closing. Amounts fluctuated by thousands day to day during the process.


Yeah it's more about their charging an origination fee at all which is the only reason it is worth mentioning.  Also my places are cheap compared to yours haha.




        
Message 9 of 9
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.