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Petko Bahovski, 46, is an experienced investment consultant in Zurich, who previously worked for Credit Suisse, JP Morgan and Coutts in Asia, Latin America and Europe. He is also the author of a practical guide How to Choose a Private Bank. He came up with the book idea in 2006-2007 during his transition from investment to private banking. And the idea didn’t let go until the text was published earlier this year.
“I noticed that banks sell themselves usually by stressing their strong points. At the same time there exists loads of information on private banking from consulting companies like BCG, KPMG, or McKinsey. But the clients themselves are usually left with bits and pieces of advice, mostly concerning how to open an account in the UK or in Switzerland,” Bahovski explained.
Translated into English and Bulgarian (Petko’s native language), the book reveals no names but answers basic questions on private banking matters. How much do you know about your private bank? How can you possibly choose who to trust with your assets? What services can a private bank offer you? How can you find the right private bank that will best suit your purposes and needs on an individual level?
The very mission of the book is to expand the mind of the clients before opening an account; you don’t need to be a hedge fund guru to enjoy it. The niche edition of 700 copies (plus an e-book) appeals first and foremost to a more affluent audience that has an investment portfolio of more than $1 million, but it could also serve as an educational source for finance students.
It took Bahovski about 3 months to complete the book: the whole process was very intense and intellectually rewarding. He dedicated an entire month solely to writing. The financier worked side by side with an English-speaking editor from a professional publishing company, striving to provide the text with high-quality language.
“I’ve received many positive reviews from my target audience. The professional community also finds it useful for their clients, as they can be a little bit more prepared and, at the end of the day, the clients are aware of what they can get from a bank,” Bahovski proudly commented.
In the beginning of October, the new book An Introduction to Investment Funds by Bahovski comes out. It will provide a thorough up-to-date summary on the whole investment fund universe and it is certainly a must-have for any investment professional. His third book, which discusses banking fines, is forthcoming.
5 tips how to choose a private banker
1) Be well-prepared. You should understand what exactly you expect from the bank and its investment portfolio management. The biggest mistake you can make in private banking is to invest into products and services blindly.
2) It is extremely important that the private banker is somebody you feel comfortable with. Even when you like the bank, if you don’t like the banker better ask for someone else. There should be a kind of chemistry between the two of you. The banker should have a clear vision of your personal financial situation and your ambitions.
3) Don’t get hooked by a brand. Banks that almost collapsed in 2008 are now the winners. If a pharmaceutical company produces an ineffective drug with bad side effects, you are never going to buy it again. In banking it is completely different. Many times banks thrive on their brand name and may lack the basic services you may expect.
4) Look through the most important things and at the services that are out of the regular scope of your portfolio management as well. Look for any extra benefits you might get, or traps you may fall in, for example in succession and inheritance situations.
5) Understand the fee structure. Get a clear concept of what you have to pay to buy, to hold and to sell an investment. There are lots of products that have hidden embedded fees. You have to work with a bank that is transparent about such matters. The banker is obliged to explain you each and every small detail. If he refuses or is dishonest, it is better to part with him.