High Value Banking: How Much is the Royal Treatment Worth to You?

Imagine this scenario: you’ve gone into the bank to see about setting up a home equity line of credit, or buying a cottage, or increasing your regular RRSP contributions. You’ve sat down in the banker’s office, gone through the details of your request, and – as you’re talking about how much equity you have, what your income is, or if you have investments held outside the bank, the person across the desk from you gets a little antsy.

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She excuses herself politely, and when she comes back she’s not talking about your HELOC, cottage, or RRSP anymore. Instead, she’s talking up the sophistication and general awesomeness of a totally different banker down the hall.

That banker has an office set apart from the usual bankers you see. That banker might even have a different colour on their name tag or office sign. You hear that she has access to better investment products, has fewer clients and therefore more time for you, that she maybe has designations that your banker doesn’t, or might be able to give you better pricing on your banking or borrowing products.

Every one of the six charter banks in Canada has a special offer like this, which on the scale of elitism lands higher than regular (or core, or retail) clients but below actual private banking clients – those folks with enough money that they might not ever need to darken the door of a neighbourhood bank again.

Every one of the banks divides its clients up according to their income, investable assets, and securable net worth, and the ones that are subject to the kind of meeting described above are considered (and referred to, just not in public) as “high value clients”.

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It probably feels pretty good to get singled out for it, to get a special card, for your online banking login screen to change colours, and to – sometimes – be treated differently by the tellers. If you ever overhear someone referring to you as a high value client, you might even preen a little bit; you’re valued.

But stop for a minute and think very, very carefully about what actual, quantifiable benefit you’re receiving as a “valued” client. Are you entirely sure that you’re valued? Might you instead be simply valuable?

Is your everyday banking cheaper than you could find elsewhere, or with a different combination of products available to everyone?

Is your lending at a lower interest rate than someone else with a comparable credit score and ability to repay? Demonstrably?

Are you receiving more interest on your GICs? Are you paying lower MERs on your mutual funds? Are you receiving a lower annual price to manage your assets?

Is your ability to have your banker or her assistant complete transactions or make changes for you by virtue of a phone call or email because they’re elite bankers, or because you have a signed agreement on file that anyone could get in order to enjoy the same convenience?

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Do the tellers/telephone representatives/bank machines treat you well because they know you/they’re polite/they’re machines, or are they in awe of your elite status and scared of what the loss of your business might do to the bank if you wait in line too long?

Now, it’s entirely possible that the only person worth talking to in a branch is the High Value banker, whatever your particular institution might call her. She (or her assistant) might have been with the bank longer than you’ve been alive. She might know all the procedural ins and outs, she might have the disposition to fight for you to get the best pricing and the best service, and she might have the most level-headed and fee-conscious approach to investing possible.

Or she might not.

I can tell you this: she is not any more or less guaranteed to be in the same position the next time you need to speak to her. Turnover is just as problematic for this position as it is for regular advisors if not more so, since often this pool of staff is targeted for regional management. You might get someone with whom you can build a decade-or-more-long relationship or someone will stay in the office until next year. It depends entirely on her own personal ambitions.

She is not any more or less guaranteed to have more certification or training. Often, especially in smaller towns, the demand to have someone’s – anyone’s – rear-end in that seat to be present for an existing pool of high value clients is overwhelmingly more important than holding out for the next highly-qualified individual who has the entire alphabet after her name and happens to be jobless.

In fact, this position is almost always much more in tune with the bottom line of their operations than a regular bank representative is.

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Think about it this way: to succeed, and – perhaps more importantly – to appear to succeed in a sales-driven industry like banking, you need to know exactly how the sale of each financial product impacts your bottom line. As a lowly banker with ambitions of promotion, you absolutely cannot afford to let anyone waste time in your office without buying something, and preferably something that will impact your performance scorecard as positively as possible. Management would rather promote from within, and the people who get promoted to high value positions are the people who excel at selling.

So if you’re offered the special card – or if you have one languishing in your wallet right now – spend a little bit of time thinking very carefully about how valuable your business is to your bank. They want your money – your lending, your accounts, your investments, and your transactions. They want it badly enough to create a whole other service channel to create the perception of better, more personalized service and elite status, but they don’t have to pay up unless you demand it. They’re beyond delighted if you just take the fancy card and feel good about it.

Don’t settle for being herded into a cordoned off area marked with dollar signs. Understand your value to the institution, and use that as leverage to negotiate a better deal for yourself.

Sandi Martin is an ex-banker and fee-only/advice-only financial planner at Spring Personal Finance who specializes in working with regular folks who suspect their money might be a bit of a mess. She lives in beautiful Muskoka with her husband and three children, and works online and by phone with clients across Canada.

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  1. Robert on November 28, 2014 at 8:00 am

    I don’t know whether to feel sad or happy about it but I did not even know this existed. There are very few things to pull me into a branch. The only basis for loyalty to my bank is lack of a major reason to switch. I am a bit surprised that they never have done anything to retain me.

    I found out last year that they cannot send foreign money transfers unless I set up a new account, but that wasn’t quite enough to get me to look around at the others because my local sleazy money store knew how to do it from my existing account.

  2. Lynne on November 28, 2014 at 8:39 am

    This is hilarious! Thanks Sandi. I do so little business with my bank, they don’t even know me…ha ha ha…guess I’m a no-value client 🙂


    • Sandi on November 28, 2014 at 9:19 am

      “I guess I’m a ‘no-value’ client” I’m dying over here! Thanks for the laugh, Lynne.

  3. Paul N on November 28, 2014 at 11:29 am

    Do you know the approximate level of AUM you need to have with the banks to be considered “High worth”?
    If you do meet this level and you are not recognized yet, how would you do the process in reverse? Could you ask to see the High net worth client Banker in charge?

  4. Robert on November 28, 2014 at 12:29 pm

    Sandi, Does a bank see brokerage and business holdings as contributing to how valuable customers are? If so I could use that as leverage sometime.

    • Sandi on November 28, 2014 at 12:41 pm

      Yes, most do.

  5. Jackie on November 28, 2014 at 3:56 pm

    I am one of these “valuable” clients…even as I’ve been methodically working my way out the door. She is maybe a little different though since she supports my move to managing my own index funds and jokes happily that I won’t need her help for very much longer. Having said that, she has pulled a few strings for me in the past and cut through a LOT of red tape.

    • Sandi on November 28, 2014 at 4:06 pm

      That means you have a Bankosaurus Rex, Jackie!

      • Jackie on November 28, 2014 at 4:25 pm

        She absolutely is! They DO exist!

        • Sandi on November 28, 2014 at 4:27 pm

          I have dreams that someday they’ll be the standard again…maybe we’ll have to get their DNA trapped in amber and open a theme park or something.

  6. Victor on November 29, 2014 at 9:17 am

    Have you ever done a review of the banks private client services like TD’s Private Investment Advice (PIA)? These accounts need to be over $1,000,000. Many people use it for their retirement and other registered plans. Of what value do their plans have versus outside private fee-only advisers? Do they offer a better fee structure and are there funds without trailing fees?

    Keep up the good work,

    • Sandi on November 30, 2014 at 5:59 am

      Thanks, Victor. I haven’t done a review like that, but it’s a great idea. I’d be very curious to compare the services at that level.

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