The £10 million club: inside the world of private banking

It’s a sunny Monday afternoon and I’m sitting inside one of the world’s most exclusive private banks. In a cosy meeting room with steel-blue walls four plush red chairs are arranged around a wooden table. Diana Brightmore-Armour, the chief executive of C Hoare & Co, is opposite me.

“Private banking is here to stay and there’s real demand for it,” she says. “That’s partly because high net worth individuals are continuing to be asset rich and time poor. They want quick answers, bespoke lending, tradition and a deeply personal service. We often end up banking multiple generations from one family.”

Walking into C Hoare & Co, a 352-year-old private bank that has been based in Fleet Street, London, since 1690, feels like stepping back in time. A smartly dressed doorman in a pinstripe suit ushers you inside past a dozen 19th-century Brown Bess muskets displayed in glass cabinets. Brightmore-Armour leads me down a corridor lined with row upon row of leather-bound ledgers, detailing customers’ spending and borrowing as far back as the 1670s. Further inside the bank one of these books is on display, open on a page with a bank statement from 1816 for the poet Lord Byron. The bank, owned by the same family for 12 generations, also served Jane Austen, John Dryden and Samuel Pepys.

The eight partners who own C Hoare & Co today are all direct descendants of Sir Richard Hoare who set up the business in 1672. Since 2009 the bank’s bosses have typically come from outside the family. Brightmore-Armour, a former chief executive of corporate banking at Lloyds, took over in 2021. The Hoare family are still, however, actively involved in making decisions alongside the management team.

The perks

Private banks tend to have strict criteria for new clients, putting them out of the reach of most consumers. They can charge high fees for the privilege of holding an account and in return they promise an exceptional level of customer service.

Many private banks assign customers a personal banker or relationship manager, who looks after their account. They can also offer more complicated financial products than typical high street banks, and can be more flexible, taking into account a range of different income sources when deciding how much to lend on a mortgage, for example. Many private banks will readily lend money to a client’s children on the basis of their parent’s financial position.

Samantha Dunne, a personal banker for the private bank Hampden & Co, which opened in 2015, has taken client calls at 11pm at night and at the weekend. If papers need to be signed in a hurry, Dunne and her colleagues offer to drive them over to clients.

“It’s important to be at the end of the phone. My clients might phone my mobile when they’re abroad somewhere and want access to their accounts or have questions,” Dunne said.

When customers phone C Hoare & Co their call is answered within three seconds, according to Brightmore-Armour. “We have customers that ring up just to test it. It’s quite funny. They say, ‘No, I don’t want anything, I just wanted to check if you’d actually answer that fast.’ And 82 per cent of the calls can be dealt with by the agent who picks up the phone. The average call time is three minutes, so for most people it takes three minutes and three seconds to have their query dealt with. That’s pretty unique.”

The consumer website Which? said in 2022 that the average call waiting time across 11 high street banks was ten minutes and 51 seconds.

Gianpaolo Mantini from the wealth manager Saltus said: “A lot of it is about prestige. It’s the cachet of being able to say that you are with a private bank. It also tends to work for high net worth individuals with limited time who don’t want to be stuck in call centres being messed around by someone who can’t answer their question.”

The requirements

Coutts private bank, known as the royal bank, requires new customers to have at least £3 million deposited or to borrow or invest £1 million. It has about 286,000 accounts. Queen Anne was a client in the 18th century and King Charles is believed to be a customer today. Private banking clients who are UK based and hold net assets of less than £249,999 with Coutts are charged £900 a year in fees but customers with more than £500,000 are not charged.

The bank was at the centre of a controversy last year when Nigel Farage revealed that his account had been closed on the basis of his political views. Alison Rose stepped down as the chief executive of NatWest Group, which owns Coutts, as a result of the row.

Coutts apologised to Farage over his treatment and said it was making improvements to its account closure process.

To open an account with C Hoare and Co you need a net worth of at least £10 million. Clients are then expected to deposit a minimum of £2 million or borrow £1 million. Banking fees are £50 a month for clients who are over 30, but normal banking transaction costs, such as for CHAPS payments, are applied on top. A number of high street banks also offer private banking to the wealthiest clients. To join Barclays private bank you need an investment portfolio of £3 million if you are UK-based and £5 million if you live overseas. To join HSBC’s private bank you need an investment portfolio worth £1.5 million.

Many banks also offer different levels of customer service based on how wealthy their clients are. For example, Barclays customers who pay in more than £75,000 a year or have more than £100,000 held with the bank can access its premier service, which offers better savings and mortgage rates and a dedicated phoneline.

The history

C Hoare & Co has about 17,500 customers, up from 16,000 in 2019. “We have quite a lot of first-time tech entrepreneurs, businesses, landed estates and wealthy individuals. We have lots of multigenerational families so we bank all age groups including our clients’ children. I met someone whose family had been clients at the bank for 11 generations. That’s almost as long as the bank has been running,” Brightmore-Armour said.

Unlike most banks, where your deposit is protected by the Financial Services Compensation Scheme, up to a limit of £85,000, customers here have their deposits backed by the Hoare family. That means if the bank were to fail the family would be on the hook for paying customers back in full. Most people join C Hoare & Co after being introduced by another customer.

“We had a new client join who I had met in Singapore after he sold a £100 million business. He wanted to set up accounts for his two young children, who were five and seven, so that they could learn about banking and financial responsibility,” said Brightmore-Armour.

After our meeting I am shown around an upstairs area of the bank known as the museum. Here you can see the oldest surviving cheque cashed by the bank, from 1676, and a letter written to the government by the Hoare family in 1694 expressing concerns about plans to open the Bank of England.

In one room a sprawling family tree covers the wall and portraits of former partners line the corridors. The rooms, which until the 1980s were used as living quarters by the Hoare family, are opened up for customer lunches and in the winter evening they host talks.

“Money is a very personal thing. You need to understand not only what people need, but what their goals and values are. It’s very hard to do that if you just communicate with them via an app,” explained David, who heads a team of relationship managers at the bank, as he showed me around.

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The service

After my trip to C Hoare & Co I went to Hampden and Co’s chic London office, which felt like another world. Hampden, which has about 5,800 clients, has a smart, compact office on the third floor of a building on Dover Street in Mayfair.

Sitting in a boardroom the chief executive Graeme Hartop explained that the bank was set up to cater to wealthy clients who grew frustrated with the service on offer from high street banks. “At high street banks the relationship approach to banking was disappearing. Now there are not nearly as many branches and as soon as you have an element of complexity to your finances it’s hard to get the right people to talk to,” he said.

Banks and building societies have closed about 6,100 branches since January 2015, according to Which?, at a rate of about 53 a month. More than 60 per cent of the branches that were open at the start of 2015 have shut.

Hampden & Co has an office in London and Edinburgh, but about 80 per cent of client meetings take place outside the office and personal bankers say they are happy to meet clients wherever they request, whether that means visiting a castle in Scotland, a manor house in the Cotswolds or a plot of land in Hertfordshire where the client plans to build.

The clients

Customers have an average age of 59 and 60 per cent are male, according to the bank. Fees come to about £25 a month on average for personal clients, who pay per transaction, and about £50 a month for business clients. Clients normally need to be prepared to deposit £250,000 or borrow £500,000 to set up an account.

“A new client joined the bank after their house buyer fell through. They were worried that they would lose their dream property unless they could quickly get a loan. Their wealth manager contacted us to ask us to arrange a loan against the value of their investment portfolio. We met with them the next day and within a week they had the money,” Dunne said. “That kind of thing buys loyalty.”

Rachel Doerr, 53, opened a business account with Hampden & Co in October. She said she was fed up with dealing with her high street bank.

“I just find that my life is so much easier,” Doerr said. “I seemed to be spending a lot of time screaming down the phone trying to get through to a human being, using a system that didn’t understand my voice and having issues logging in. I just felt I wasted so much time.”

Doerr, who lives in Woldingham in Surrey with her partner Nigel, 60, runs Doerr Dallas Valuations, which values art, antiques, fine wines, classic cars, watches and handbags. She has more than £350,000 in her business account.

The monthly fees of £60 to £90 a month that Doerr pays are a lot higher than the £7 to £15 a month she paid with Metro Bank. “But I have a personal banker — you dial the telephone and they answer. I speak to him a couple of times a month,” Doerr said. “I can ask him to tell me when business payments arrive in my account. The bank also runs events like its Christmas party, so you can meet other clients.”

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‘I live in Switzerland. Private banking helps me to move currencies around’

Simon Eade became a client of UBS private bank shortly before moving from Godalming in Surrey to Basel in 2008.

“It was the only bank that let me open an account in Switzerland before I had physically moved there,” said Eade, 55, who is the chief business officer for a biotech company.

He has more than £1 million with UBS in currency accounts and his investment portfolio. Each currency account costs him about 5 Swiss francs (£4.50) a month and fees for his investment portfolio are about 1.25 per cent a year.

“If you need to move currencies between countries because you have children at university or school abroad, it’s really useful. I previously worked for a US company so I have been paid money in euros, francs, dollars and pounds. Doing that with a high street bank would have been a nightmare,” he said.

Eade lives with his wife Natalia, 53, and her son Aeneas, 16. His three children, Dan, 26, who is studying for a PhD, Catriona, 24, who works in London, and Charlotte, 20, who is studying for a master’s degree, live in the UK.

Eade was also able to get an unconventional mortgage from UBS private bank to build a house in 2018. It allowed him to take out multiple loans with different expiration dates.

“We wanted to borrow quite a substantial amount and we didn’t want to have to sell our existing house. Getting a tailor-made loan was super simple,” Eade said.