Wealth-Management Tips

The value of your relationship with a private banker or wealth manager might not be obvious in a recession, when many clients have much less money to invest, spend, or save. But a private banker can help you now, too, with everything from seasoned perspective to advice on making the most of financial opportunities. We’ve compiled a list of tips on what you might do to make the most of your private banking relationship in today’s financially stormy weather.

Talk to Your Banker

There’s no magical fix, of course, but your banker can probably offer sympathy and the knowledge that you’re not alone. “We’re doing a lot of handholding,” reports David Waldo, chief executive officer and cofounder of Minneapolis-based Private Bank Minnesota. “I think a tremendous number of people are in shock over what has happened to their equity portfolios and homes.”

Don’t try to ignore the situation. “People are leery of calling their banker when they know their financial condition is deteriorating,” says Peter Dahl, CEO of Crown Bank in Edina. Such clients are concerned that the bank will curtail their credit or accelerate their debt’s amortization, requiring them to begin paying back principal faster.

In some cases, Dahl says, these clients are right: their current finances don’t support their old credit limits. But that’s true whether you pick up the phone or not, Dahl adds. “All of our borrowers are required to give us a financial statement each year,” he says. Your financial strategy was created to fit your circumstances. As that situation changes, your overall financial strategy should change, too.

Calculate Cash-Flow Needs

Can your current portfolio meet your monthly cash-flow needs? This may be an immediate, urgent question if you are retired or unemployed. In that case, a private banker can work with you to cut investment and management fees, reposition investments, refinance debt, and adjust your budget to boost your portfolio income.

“An individual that has $2 million invested with us and is a retiree needs a certain amount of money every month to support their lifestyle,” says Lou Gomez, senior vice president and regional director of wealth management for Associated Bank in Minneapolis. “Asset values are now impaired, and it’s much harder to generate the income they need without invading principal.”

If you have a job, the cash-flow question may be less urgent, but it’s still important. “If something happened to your job, would you and your family be okay for three to six months while you find something else?” asks Jose Peris, senior vice president in the wealth management group at Minneapolis-based U.S. Bank.