Members' Private Financial

Project Overview

We are proposing to start a new private bank (investment management, fiduciary services, bank services) using a non-stock, member owned, mutual structure.  In such an arrangement, the clients are the owners - they vote, sit on the board, hire and fire management, receive dividends when times are good, and raise rates when necessary.

Why a new bank in an already crowded and competitive field?  Because more than 80% of private bank clients surveyed said they plan to change their bank relationship (see Barron's), and there are no private banks in operation that are able to offer what we plan to offer - ownership and control to all clients.  In discussions with wealthy families and industry veterans, as well as banking regulators, I have received very encouraging and positive feedback.

Benefits

This ownership arrangement offers a number of benefits to clients relative to stock-holder owned institutions:

1. You can trust the integrity and objectivity of advice and services
- Duty to client defines the business model because there are no independent shareholders to satisfy
-  Bank and investment operations are highly transparent and tightly regulated
-  Clients control governance and risk
-  You pay for highly attentive personalized service, and not for shareholder returns

2.  Operating savings and surplus earnings are passed along to you
- Lower fees contribute to your portfolio's long-term net performance, and not to shareholder returns
-  No ownership premium in the pricing - fees are lower
- You keep the money you earn, only pay for the services you receive, and not for shareholder returns

3.  Control of strategy will ensure continuity, longevity and quality of services for your heirs
- Clients determine the strategy of the business, to best serve their needs
- Independence is in the hands of the clients - provides long-term continuity of relationship for beneficiaries
- Scope of services is determined by the clients - not by independent shareholders
-  Pace and strategy of growth is driven by members needs, not by capital market pressure on stock price
-  Investment and use of bank capital is driven by members goals
-  Executive compensation is approved by the members.

Planned Scope of Services

We plan to offer the full complement of private banking services, that are only available at a small number of national private banks today.  These include:
1.  Investment management services
2.  Trust and estate services
3.  Banking and securities services

A more detailed list of the services are available in this database where you can add your comments and ideas.

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