This is a follow-up to my earlier post on whether relationship managers (RMs) and privileged banking (PB) services are worth it. The quick answer to that question was yes.

But there are still things you need to look out for. You can’t take everything at face value, and you need to understand what’s really important. Otherwise, you will be taken for a ride.

Here’s my take on it.

Low Interest Rates and Transactions

Leveraging is the main benefit of PB services. It is the cheapest you can find in Singapore. It’s not worth it to be a PB client based on the ability to buy products. First of all, there are very few products under PB which cannot be found anywhere else. Secondly, it is often more expensive to buy under PB services. Buying mutual funds have a 1-2% sales charge, which can be done for free at FSM. You also shouldn’t be paying more than 1.5% in sales charges. If they like you, it can fall to as low as 1%, and I believe this is the lowest it can go.

Because they are recurring, interest rates will be your largest cost. While the banks are fairly competitive between each other, a difference of even 0.1% can be significant.

So ensure that you get a good spread. The spread is whatever the bank charges over SIBOR (usually 1 month). This is between 0.5% – 1%. The combined SIBOR and spread shouldn’t be more than 1.5% as of this writing. If your PB can help you borrow in yen, it is even cheaper.

You can also find leveraging at brokerages, but they will cost significantly more than at PBs. Just a note that while the brokerages charge more than PB services, PBs have far more red tape and you can’t leverage on shares. That’s the reason I maintain a separate margin account at my brokerage.

Speaking from personal experience, I’ve noticed the Singapore banks charge slightly more than the foreign banks. It is understandable since they have deep roots here and most people have existing relationships with them. But that is also the reason why foreign banks can be more competitive, and you should take a look at them. By right, all banks operating in Singapore are closely regulated by MAS and there shouldn’t be much difference in their stability and security.

A Candid RM

I’ve met RMs who read from a script when giving advice. They are usually young and just starting out. They haven’t had much real-world experience to draw upon, or have guided many clients.

I don’t like these kind of RMs. I came to PB for privileged advice, and to listen to someone who knows more than I do. I want to learn beyond what is written, and what people are actually doing.

That’s why I prefer a RM who is experienced and able to share openly. One of the things I like to talk about with my RM is what other people are doing and how they reacted to market news. It gives me a sense of what is a good investment. This is something I can’t get anywhere else.

In addition, your RM must be responsive. When you message them, they should reply near immediately. Of course, be reasonable and don’t message them at night or on the weekends. But when it comes to your money, be ruthless and insist that your interests are put first.

A good RM will also contact you if there are good deals and recommend products that can give a better return while meeting your risk profile. His or her eyes are always toward making you money.

Ignore the Welcome Gifts

Banks are usually quite eager for new customers, and roll out the welcome mat through rebates and cash bonuses for depositing new funds or buying products.

I would advise that you ignore these childish sweeteners, and focus on your true long-term costs. These are interest rates and sales charges. These endure far longer than the welcome gifts.

All the concierge, dining, travel, and other benefits are generally a waste of time. Even the credit cards aren’t that good. Most of the time, the retail banking services have superior offers.

Don’t be blinded by the gifts, nice offices and coffee. These are frivolities, and people who are impressed by frivolities are easy prey. They cost money, which the bank will undoubtedly want to make back. Don’t spend hundreds of thousands to earn a few hundreds in return, and investing should not be on the basis of welcome gifts.

Ask Questions

I don’t accept everything my RMs say at face value. I listen to what they pitch with an open mind. But I go home, pull up my own excel and plug in the numbers. I don’t make the decision rushed. Good investments will always be there.

Ask what are the risks, historical returns, and what will you stand to lose. Ask what other clients have experienced or are doing. How does the investment behave through extraordinary situations?

This is one of the main advantages of being a PB client. You can ask whatever you want and take as much time as you need. Even if your RM doesn’t know the answer on the spot, they are supposed be able to ask their internal specialists and then let you know.

Your RM isn’t right all the time either. They have told me many wrong things and neglected to inform me how to manage my risk. For example, one RM was urging me to use cash to top up my margin account, which meant I had to sell shares at a lost. I figured out myself that I could pledge shares as collateral instead. If I had listened to her, I would have swallowed tens of thousands in losses. Your natural attitude towards an RM should be of scepticism, and the burden of proof is on them. If they are unable to prove that an investment is safe and offers a decent return, you should walk away.

I have rejected many of my RMs’ investment suggestions, and asked them to explore other venues. It’s how I picked up my Temasek bond, when the RMs were pushing banks and property counters in 2018. This has paid off hugely both in capital and recurring gains. Recognise that RMs are mainly a gateway to hundreds of thousands of cheap loans for you. Their ability to make clients money, especially returns that exceed the market, is iffy. They are human too and can’t predict the future.

You can also listen to more than one bank. It’s easy to set up an appointment with an RM at another bank. You can compare products and pricing, and play them off each other. Tell one that another bank offered you XX, can you match that? More often than not, they will.


The topic of how to use PB services is not talked about much, and I hope this article will help you get the best deal possible. To recap:

  1. Keep an eye on your costs
  2. Get a good and honest RM
  3. Ignore the ego boosting perks
  4. Ask questions

Hope you guys enjoyed the article, and let me know if you have any questions.

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