For a long time, the legitimacy of private banks rested on a clear promise: to provide access to rare, complex opportunities reserved for a select group of investors. This ability to provide access defined their role, their value, and their central position in the relationship.

But this scarcity is fading. And with it, the very balance of the model is becoming fragile. Not because it is outdated, but because the rules that made it relevant have changed (and these changes have been largely underestimated).

A model that is crumbling at its very foundation

Access and information are no longer decisive advantages

The traditional business model of private banks was based on two pillars: access and information. They controlled access to hard-to-reach investment opportunities—particularly in the private market—and possessed the expertise needed to analyze and secure them.

Today, these two advantages have diminished considerably.

Information has become more widely available. High-net-worth clients are now far more sophisticated than they were ten years ago. They have access to a wealth of information—often of high quality—and rely on external advisors who can challenge the bank’s recommendations. The information asymmetry that was once the model’s strength has diminished.

Similarly, access has become more widespread. Specialized platforms have streamlined the distribution of private equity, while asset management firms have developed offerings aimed directly at private clients. Investment opportunities are now available outside traditional banking channels.

What once set things apart is now becoming commonplace.

The customer is no longer a captive; they call the shots.

This transformation has profoundly changed customer behavior. Private banking clients are no longer in a dependent relationship; they are constantly weighing their options.

He selects his advisors based on the value they add, spreads his investments across multiple providers, and builds his portfolio with greater autonomy. His bank is no longer the focal point of his wealth, but rather one entry point among many.

This change is often underestimated, because the relationship appears, on the surface, to be unchanged. The client keeps their accounts, communicates with their banker, and maintains a connection. Yet a growing proportion of decisions—often the most pivotal ones—are made elsewhere.

The relationship remains, but the influence shifts.

Private Equity: A Sign of a More Profound Shift

A market that opened up without going through the banks

Private equity perfectly illustrates this trend. Long restricted to a select few due to its complexity and high entry barriers, it was an arena in which private banks played a key intermediary role. But that role is rapidly eroding.

New players have profoundly transformed the market: they have consolidated the product offering, digitized the investment process, and lowered the barriers to entry. At the same time, major asset management firms have developed solutions specifically designed for private clients, tailored to their needs. As a result, access to private equity no longer necessarily goes through banks (and is increasingly taking place outside of them).

In Europe, companies such as Altaroc this transformation by offering simplified access to strategies that have historically been reserved for large institutional investors.

Opportunities Emerging Outside the Banking System

But the most fundamental change lies elsewhere. It is not just a matter of distribution channels, but of the way opportunities themselves emerge.

Private equity is increasingly operating as a network-driven market. Investments are forged among entrepreneurs, former executives, and experienced investors. Opportunities arise within closed circles, spread throughout specific communities, and materialize through co-investment arrangements or club deals.

 In this context, banks are no longer simply bypassed at the end of the process; they are often absent from the very beginning of the transaction flow.

Disintermediation is already underway, but it is not very visible

This disintermediation is already well underway, even if it remains difficult to perceive. It does not take the form of a sharp break, but rather a gradual shift.

Customers are not leaving their banks; they are redefining the banks’ role. They keep a portion of their assets with their banks, while making an increasing share of their investments elsewhere (particularly in private equity, where the largest amounts and the highest potential returns are concentrated).

For banks, the consequences are far-reaching: a loss of visibility into part of their assets, a weakening of their ability to structure a coherent overall asset allocation, and, ultimately, an erosion of their legitimacy as strategic advisors.

A wave of transformation that is still underestimated

3,000 billion euros at stake

In addition to this structural shift, there is a major demographic trend. Over the next ten years, nearly 3,000 billion euros will be transferred in France, with more than 20% of the nation’s wealth likely to change hands.

This period marks a key moment for asset reallocation. It could have presented a major opportunity for private banks, both to strengthen their relationships with younger generations and to reposition their portfolios.

But there is no guarantee that these flows will remain within their scope.

 Capital Reinvestment: A Strategic Blind Spot

The real challenge lies not so much in the transfer of assets as in their reinvestment. However, in this area, banks appear to be inadequately prepared. Reinvestment is still too often approached reactively, with offerings that lack differentiation and, at times, a limited understanding of clients’ specific needs—particularly those of older clients.

Yet these needs are many and varied: generating income, funding long-term care, tax optimization, intergenerational wealth transfer, and diversification. Given this complexity, a one-size-fits-all approach is no longer sufficient. This gap has created an opportunity that other players—who are more specialized or more agile—are already filling (with private equity as the key driver).

Rethinking the role, not just the offering

‍The Limitations of the Distribution Model

Faced with these changes, private banks are tending to adapt their offerings by incorporating more private equity solutions. But this response is only partial. The real challenge lies not in the breadth of the offering, but in the bank’s position in the value chain. As long as a bank positions itself as a distributor, it remains vulnerable. In an environment where access has become a commodity, distribution no longer constitutes a sustainable advantage.

From Distributor to Architect

In the face of these changes, private banks are tending to adapt their offerings by beginning to incorporate more private equity solutions. But this response is only partial. The real challenge lies not in the breadth of the offering, but in the bank’s position in the value chain.  As long as a bank positions itself as a distributor, it remains vulnerable. In an environment where access has become a commodity, distribution no longer constitutes a sustainable advantage.

From Product to Portfolio: The True Paradigm Shift

The challenge is no longer simply to add a few private equity funds to an existing offering. It is to enable clients to build and manage a genuine unlisted asset allocation over the long term. For years, the prevailing approach has been to distribute funds opportunistically, often through feeder structures, without an overall view of the portfolios. This approach has now reached its limits.

The most sophisticated investors no longer think in terms of individual funds; they think in terms of strategies, diversification, vintages, liquidity management, and the gradual build-up of exposure. In other words, they manage their private equity investments much as large institutional investors do.

It is precisely in this area that private banks can regain a central role. Their value no longer lies in their ability to provide access to additional capital, but in their capacity to design, implement, and adjust a coherent investment strategy over time. In the future, clients will no longer simply purchase a product; they will expect a turnkey solution that allows them to manage their unlisted asset allocation with the same rigor as the largest institutional investors. This shift marks the transition from a distribution-focused approach to one centered on wealth management—one that is far more strategic and sustainable.

The necessary repositioning runs much deeper. Private banks must evolve into the role of architect. Architect of a comprehensive asset allocation strategy that fully integrates unlisted assets. Architect of a rigorous selection process in a universe that has become abundant. Architect, finally, of a decision-making framework that enables clients to navigate with consistency and discipline. This transformation requires substantial investments (in skills, organization, and culture), but it is essential to regaining a central position.

Conclusion

Private equity does not drive the transformation of the private banking model; rather, it is the most visible indicator of that transformation. In a world where access to information and products is no longer scarce, value no longer lies in distribution, but in the ability to structure, select, and support decisions over the long term. Private banks can still play a central role, provided they are willing to redefine it. For one rule remains: when you stop participating in decisions, you always end up leaving the relationship.

Testimonial - Michel Matthieu

In this article, we describe a gradual disintermediation of private banks, particularly in the area of private equity. In your opinion, is this a cyclical phenomenon linked to recent innovation, or a structural and irreversible shift in the value chain?

I don't think we're seeing private banks disappear from the private equity value chain. However, we are seeing a profound transformation in their role.

This trend is driven primarily by the clients themselves. In an environment where public markets offer more limited return prospects, investors are increasingly seeking solutions capable of generating long-term returns.

However, many financial advisors are still unfamiliar with this asset class. This is particularly true within large banking networks, where the level of expertise regarding recent market innovations, new investment structures, and portfolio-building approaches remains inconsistent. This situation naturally creates an opportunity for specialized providers capable of offering expertise, education, and guidance.

That is why I see this more as a matter of complementarity than a complete shift in the value chain. Banks have a major advantage: the relationship of trust they have with their clients. However, they need better support in training their teams and in marketing private equity solutions, which have become more complex and sophisticated.

The rise of independent wealth management advisors perfectly illustrates this trend. The amounts they raise from clients who have traditionally banked with traditional banks demonstrate that demand exists and is very strong. Clients are not necessarily questioning their banks; above all, they are looking for advisors capable of helping them meet their new investment needs.

The challenge for private banks, therefore, is not to fight this trend, but to adapt to it. Those that are able to rely on specialized partners and enhance their teams’ skills will retain a central role in client relationships. The others risk gradually seeing the most strategic investment decisions made outside their sphere of influence.

If access and information are no longer differentiating advantages, what new, tangible sources of value can a private bank develop to remain central to its clients’ investment decisions?

I’m not sure that access and information have ceased to be key differentiators in private equity. This asset class remains complex, technical, and relatively little known. The real challenge lies instead in the ability of bankers to share this expertise with their advisors and make it accessible to their clients.

The primary source of value, therefore, lies in strengthening training and support for bankers. Many advisors are not yet fully comfortable with the specifics of private equity, its mechanisms, its risks, or its recent innovations. To maintain their credibility with increasingly well-informed clients, banks must invest more in developing their teams’ skills.

The second priority is to align sales strategies with this ambition. As long as advisors’ objectives and incentives remain primarily focused on traditional products, private equity will struggle to find its place in investment portfolios. If banks truly view private assets as a strategic component of their clients’ wealth, they must also reflect this in their management and sales strategies.

The third source of value lies in the openness of the product architecture. Today’s customers expect their bank to give them access to the best solutions on the market, regardless of where they come from. However, many banking networks remain heavily focused on their in-house products. This approach can be perceived as restrictive and may limit the advisor’s ability to build an investment portfolio that is truly tailored to the customer’s needs.

Ultimately, trust remains the decisive factor. It is what enables a private bank to remain at the center of its clients’ wealth management decisions. However, this trust can be undermined when clients feel that recommendations are driven primarily by internal distribution constraints. Conversely, institutions that prioritize openness, transparency, and freedom of choice strengthen their credibility.

The success of independent wealth management advisors perfectly illustrates this trend. Their advantage does not necessarily lie in superior expertise, but often in greater freedom in choosing the solutions they offer. Private banks that can combine the strength of their client relationships with a truly open architecture will be best positioned to maintain a central role in tomorrow’s investment decisions.

The upcoming large-scale transfer of wealth is often presented as an opportunity: In your opinion, what are the main risks for private banks if they fail to capture the reinvestment of these funds?

 The risk is not solely related to the upcoming wave of asset transfers: it has existed for many years. In the event of an inheritance, the heirs are not necessarily clients of the deceased’s bank. There is therefore no guarantee that the transferred assets will naturally remain with the institution that previously held them.

The wealth transfer period is a particularly sensitive time, as it is often accompanied by a thorough review of banking relationships and investment strategies. Heirs reassess their needs, compare available options, and are generally more open to engaging with a variety of advisors. For private banks, retaining this capital therefore requires a significant effort in terms of organization, support, and innovation.  

In this context, private equity can be a powerful driver of appeal. This asset class is attracting growing interest from investors, but it is still not sufficiently offered or explained by many banking networks. Conversely, independent wealth management advisors, as well as certain more open-minded banks, have often made private equity a key component of their value proposition.

The main risk for private banks is therefore that competitors will gradually take over their client relationships. When a Financial Advisors another bank succeeds in meeting a specific need (for example, by offering a tailored private equity solution), it generally does not stop at simply distributing a product. It builds a relationship of trust with the client and naturally seeks to gradually expand its scope of involvement to other aspects of the client’s wealth.

In other words, the real issue is not just the loss of an investment or a subscription. It is the risk of seeing the advisory relationship shift to another player. And when trust shifts to the other side, asset flows often tend to follow.

 The shift from the role of distributor to that of “architect” is at the heart of this analysis: What specific organizational, cultural, or economic changes does this entail for a private bank, and what are the main obstacles?

The shift from a distributor role to that of an architect entails a profound transformation of the way private banks are organized. It is not simply a matter of adding a few private equity solutions to an existing product line, but of developing a genuine global advisory capability for private assets.

 Today, few institutions have the teams, expertise, and networks needed to conduct an in-depth analysis of the international private equity landscape. Even among major players, this expertise is often concentrated within specialized teams and does not always trickle down to the advisors who are in direct contact with clients. Historically, banking networks have been built primarily around liquid, standardized, and easily distributable products, such as traditional funds, life insurance, and ETFs.

- To evolve into an advisory role, banks must therefore significantly strengthen the training and support they provide to their private bankers. Clients today are much better informed than they used to be. And when they don’t fully understand certain topics themselves, they now have access to simple, free, and effective tools that allow them to quickly learn about asset classes that were once reserved for specialists. This shift requires advisors to elevate their expertise and provide genuine advisory value. One of the major challenges is also reassuring investors. Private equity is often still perceived as a complex or risky asset class. Advisors must be able to explain its mechanisms, benefits, limitations, and role within an overall asset allocation strategy. This educational approach is essential to supporting the democratization of this asset class.

- This transformation also requires a shift in the range of services offered. Many banks remain heavily focused on their own products, which sometimes limits their ability to offer the best solutions available on the market. To meet customer expectations, they will need to further develop open architecture, either directly or through white-label partnerships with specialized providers capable of delivering global expertise.

- Finally, the main obstacle is likely cultural. For a long time, the banking model has been based on the distribution of “in-house” products that are relatively easy to market. The “architect” model, on the other hand, requires greater objectivity, customization, and the ability to select the most appropriate solutions—even when they come from external partners. This means changing habits, compensation structures, and sometimes even the way sales performance is evaluated.

- The banks that will succeed in this transformation will be those that manage to combine the strength of their customer relationships with enhanced expertise, a more open architecture, and a genuine ability to support their customers in making increasingly sophisticated wealth management decisions.