Private banks should chase founders, not liquidity

The writer is founder of AI workforce reskilling platform Flashpass and online marketing agency Candid Network

The average private banking client is 63 years old. That tells you everything you need to know about where the industry is looking, and who it’s missing entirely. 

The founders who will control the next generation of capital are, right now, invisible to the institutions that will eventually compete for them. Relationship managers, private bankers and wealth advisers all optimise for wealth that already exists, not wealth in the process of being built.

The industry’s operating model effectively reads: “We’ll meet you at the finish line.” But by the time the race is over, loyalty has already been decided. Private banks and wealth management firms are structured to serve wealth once it materialises, but they have almost no infrastructure for supporting the people in the process of creating it, when capital is fragile and decisions carry asymmetric consequences.

JPMorgan’s private banking clients typically have $5mn to $10mn in investable assets. Citi sets its threshold around $25mn in net worth. Goldman Sachs, though it does not publicly disclose a hard minimum, operates at a similar level with a main focus on ultra-high net worth clients. 

From a pure short-term profitability perspective, this makes sense. From a long-term capital allocation perspective, it is a mistake. Optimising exclusively for present assets instead of future assets is a strategic misallocation. 

For founders who haven’t yet reached liquidity, the experience of engaging a private bank or traditional wealth manager usually results in one of three outcomes: they’re told they don’t qualify; they’re offered a standard retail product with a private banking label on it; or they’re ignored entirely.

There’s no consistent framework across the industry for serving high-potential founders pre-exit, and the client relationship only begins once risk has been removed. This would be defensible if it were efficient. It isn’t.

Unloved and unserved

Industry research suggests a substantial portion — between 35 and 50 per cent — of existing private bank client relationships are already unprofitable. In other words, firms are expending energy subsidising marginal accounts while overlooking the single greatest source of future ultra-high net worth clients and leaving entrepreneurs building real companies entirely unserved. 

Private banks and wealth managers have spent years competing aggressively for clients who have already won, but the smarter play is to be the firm that founders think of when they’re still competing. The case for engaging founders earlier starts with a simple demographic reality: entrepreneurship is the primary engine of new wealth creation at the top end of the market. 

The global high net worth population grew 2.6 per cent in 2024, with ultra-high net worth individuals increasing 6.2 per cent and 562,000 new millionaires added in the US alone. Research from Henley & Partners shows roughly 20 per cent of migrating millionaires are entrepreneurs or founders, and among centi-millionaires and billionaires, that number rises above 60 per cent.

Wealth in motion

The pipeline of future private bank clients is entrepreneurial wealth in motion, not static power, yet the default response from many institutions is to point to start-up failure rates as justification for distance. 

Yes, many businesses fail. But this framing confuses investment exposure with relationship exposure.

A wealth manager who builds an advisory relationship with 10 founders doesn’t need all 10 to succeed, because they know that even a small percentage of successes creates disproportionate wealth. If those early relationships produce two or three major outcomes, their lifetime value dwarfs the cost of engagement and results in a generationally valuable client book.

Trust built under pressure cannot be retroactively purchased at liquidity, but it builds naturally when you’re treating founders as clients of the whole firm, not just as future AUM targets.

Building trust early looks like lending against equity positions in venture-backed companies, a product that exists in boutique form but is almost never offered proactively to pre-exit founders.

It means accessible credit facilities for founders who have demonstrated traction but haven’t yet exited. It means advisory relationships that help entrepreneurs make smart personal finance decisions while the business is still being built — because the tax structures established in year two can save meaningful money in year six, and most founders don’t know that until it’s too late.

By the time liquidity arrives, the most important structural decisions have already been made. Some institutions gesture toward this. Morgan Stanley’s private wealth division frames its services around multiple stages of entrepreneurial wealth.

HSBC’s private banking arm claims to support entrepreneurs, “no matter what stage” of the “entrepreneurial journey” they are embarked on. 

Are the structures in place as inclusive as the language deployed by the best marketing teams money can buy? Not quite. In practice, the meaningful services — the sophisticated credit structures, the co-investment access, the dedicated relationship manager — remain gated behind asset thresholds that pre-exit founders can’t meet. 

The entrepreneur who sought a credit line in year three and was turned away will not return in year seven when the exit closes. What they will remember is who answered the phone when capital was scarce, when payroll was tight, when personal guarantees felt existential.

Even accounting for high failure rates, Gen Z entrepreneurship will continue to drive a disproportionate share of new wealth creation globally. Private banks risk ceding the next generation of ultra-high net worth clients not because they lack capability, but because they arrive too late.

Emil Barr, founder of Flashpass and Candid Network