Private Banking clients, from product to service: preferring advanced advisory over basic advisory

The majority of Private Banking assets are still managed under basic advisory mandates, and only 22% of assets are managed with all the advantages of the advanced advisory model.

By Francesco Megna*

The wealth managed by Private Banking in the first six months of 2025 grew by 2.5% compared with last year, with assets under management amounting to more than 1,300 billion euros; the weight of insurance products and the managed segment has been steadily increasing and, in the last quarter, together they reached 60% of total managed wealth. The increase in the share of managed assets gathering is mainly supported by mutual funds, which grew by about 4% in the last quarter, as well as by the market effect.

For private banking clients, that is, investors with financial assets of more than 500,000 euros, the coming months will represent a major turning point. For four years now, the European directive Mifid 2 has been in force, with the aim of seeing a more advanced form of advisory grow through greater transparency in the financial services sector, highlighting precisely the advisory activities that banks offer clients when managing their assets. To date, however, only 22% of assets are managed with an advanced advisory model. A further 18% is instead handled through asset management. The majority of wealth (around 50%) is still managed through the so-called basic advisory mandates, under which managers provide generic advice to the client on how to manage their wealth.

And yet the advantages of an advanced advisory model are many, because it allows a shift from a product logic to a service-based one, encouraging the growth of the client portfolio and also promoting increasingly dynamic investment in support of the country's economic development. It should also be noted that the share of wealth invested in the so-called open architecture (distribution of third-party funds/SICAVs, in addition to those from the firm’s own product factory) is limited compared with foreign countries (50% versus 70% in the more advanced European countries). It is therefore necessary for all financial intermediaries to make available to their clients a broad range of investment products, despite concerns stemming from Mifid 2 regulations, which could make the procedural process more costly.

Above all, those operating in Private Banking today must face numerous challenges, from the generational change in the client base to the new opportunities offered by technology to increase the number of clients followed by each individual manager. Moreover, the frequent phases of volatility in financial markets have strengthened clients' desire to preserve and optimise their wealth. This is a characteristic of the entrepreneur client, who is particularly attentive to protecting their wealth also in relation to the dynamics of their business activity. For this reason, the offering always seeks to look at the client from every angle.

Finally, technological innovation is also partly changing the work of the private banker; the client has begun to use the channels available to get in touch with the bank, such as apps. Greater use of technology will facilitate interaction with the client, allowing the banker to devote more time to higher value-added activities for current and potential clients. With regard to the female client base, in recent years female investors have more than doubled, and they favour the relational aspect, asking for the presence of an adviser who can provide tangible solutions. They have very high expectations and therefore only a specific, dedicated offering will be able to meet their needs.

* Commercial manager, primary hub of a banking group, coordinator of private and business managers