While each individual’s search will be as unique as his or her needs, some basic criteria can be used to separate the leaders from the laggards. To give our readers a head start, Worth sent a detailed questionnaire to 30 leading private banks with at least $5 billion in assets under advisement and that service relationships of $25 million and above.

We asked these banks about their prowess in economic and market forecasting and how their portfolios performed. We asked about their fee structures and the services they provide. Finally, we asked how they work with their clients, and what kind of credentials and expertise their wealth advisors bring to the job. Their responses and our independent research provided insights into the range of competencies private banks offer, and what clients should expect from a best-in-class firm.

We have published a truncated version of our questionnaire on page 69. As you evaluate your current advisory relationships, or search for new ones, we hope you will find it a useful tool in your search for your own best-fit firm. (Advice on how to carry out your search can be found in "Navigating the Advisory Jungle," beginning on page 65 of our January 2006 issue.)

Unfortunately, some private banks attempt to cultivate a mystique about their fees, services and products. If a bank balks at any of the questions you pose–as some did with us–it may be a sign that you should take your business elsewhere.

Investment and Forecasting Performance

Even a private bank that wholeheartedly embraces open architecture–that is, offers unrestricted access to third-party products and services–and hires outside asset managers for its clients needs financial market and economic forecasting expertise. Oddly enough, this is one area that some banks refuse to discuss openly. They hide behind soporifics about the importance of tailoring portfolios or of long-term investment views. Of course, both of those points are crucial, but banks still need to be able to take informed views on the markets and the economy. If they do it well, they should have no qualms when their clients ask to scrutinize their short-term (say, one year) and medium-term (say, five-year) track records. Even firms that do not manage money should have a view on the markets–otherwise, their advice to clients on asset allocation and their choice of asset managers is suspect.

A bank’s model portfolio–essentially, its asset allocation recommendation–is one useful gauge of competence. Asset allocation accounts for nearly three-quarters of the success or failure of a client’s portfolio (skill at picking individual managers or securities within an asset class accounts for the rest). Most firms have several off-the-shelf model portfolios for clients with different risk appetites. Comparing the one- and five-year performance of firms’ model portfolios for clients with a medium or average risk appetite gives some idea of their relative skill in predicting which asset classes will outperform.